Goldman Sachs Group Inc. has agreed to pay $5.06 billion to settle claims that it misled mortgage bond investors during the financial crisis. The settlement, disclosed by Goldman in January, arises from the company’s conduct in packaging, securitization, marketing and sale of residential mortgage-backed securities between 2005 and 2007. Investors suffered billions of dollars in losses from the securities bought during the period, according to the Justice Department.

The settlement comprises a $2.385 billion civil penalty and $1.8 billion in other relief, including funds for homeowners whose mortgages exceed the value of their property, as well as distressed borrowers. The government’s ability to bring criminal charges against Goldman is also preserved. The settlement agreement does not release any individuals from potential criminal or civil liability, the Justice Department said.

In addition, Goldman will pay $875 million to resolve claims by the New York and Illinois attorneys general, the National Credit Union Administration and the Federal Home Loan Banks of Chicago and Seattle. A state and federal working group formed to investigate wrongdoing in the pre-financial crisis mortgage-backed securities market negotiated the settlement, said New York Attorney General Eric Schneiderman. The group has reached settlements with five other major financial institutions since 2012: J.P. Morgan Chase ($13 billion), Bank of America ($16.6 billion), Citibank ($7 billion) and Morgan Stanley ($3.2 billion).

Source: Reuters

We're here to help!

We live by our creed of “helping those who need it most” and have helped thousands of clients get the justice they desperately needed and deserved. If you feel you have a case or just have questions please contact us for a free consultation. There is no risk and no fees unless we win for you.

Fields marked * may be required for submission.

Thank you for all your hard work

Thank you for all your hard work over the past years on my behalf and so many others. God bless you all.

—Ella