And nobody goes to prison……ever. A fine of $5.1 billion is a lot of money, the crimes must have been so egregious and the shareholders pay for the sins of the executives.-Lou
More than 10 years after it spotted cracks in the housing market, Goldman Sachs will pay $5.1 billion for its role in the financial crisis.
The settlement announced Monday with the Justice Department resolves allegations that the bank misled investors about risky mortgage bonds it sold as supposedly safe investments.
In addition to the DOJ, the agreement resolves claims brought by New York Attorney General Eric Schneiderman and other states. New York will get $670 million, with most going to consumer relief such as mortgage assistance and principal forgiveness for underwater loans.
“Today’s settlement is another example of the department’s resolve to hold accountable those whose illegal conduct resulted in the financial crisis of 2008,” Benjamin C. Mizer, head of the Justice Department’s Civil Division, said in a statement.
CEO Lloyd Blankfein’s Goldman is the last of the big US banks to settle with the government over its mortgage misdeeds. Bank of America paid a record $17 billion in 2014, while JPMorgan Chase paid $13 billion the previous year.
Goldman’s settlement comes just days after Wells Fargo paid $1.2 billion to settle mortgage claims, and two months after Morgan Stanley paid $3.2 billion to end a similar probe.
Goldman bought loans from mortgage underwriters such as subprime giant Countrywide Financial and repackaged them as supposedly safe securities — even though it knew many of the underlying loans were lousy, according to a statement of fact released along with the settlement.
“If they only knew,” Goldman’s head of due diligence wrote in a 2006 e-mail.
When the bank’s Mortgage Capital Committee, which is supposed to approve the loans, examined one 2006 package of mortgages, it was taken aback by how defective it was.
“How do we know that we caught everything?” the committee asked, according to the settlement.