Yet another plea deal for one of the Wall Street giants involved in the mortgage scam that triggered the 2008 financial crisis. Goldman Sachs agreed to pay $5,1 billion to dismiss charges related to the sale of mortgage-backed bonds. It is a record fine for this type of regulatory violation. “We are pleased to have reached an agreement in principle to resolve these issues,” Chief Executive Lloyd Blankfein said in a statement.
The fines relate to the sale of created Mbs sold between 2005 and 2007, before the collapse of the real estate market that triggered the crisis. Specifically, the settlement includes $2,385 billion in civil penalties to be paid to the Justice Department to settle the mortgage-backed securities (MBS) dispute, a cash payment of up to $875 million to state authorities and federal governments involved and paying $1,8 billion in consumer settlements.
Goldman in 2014 had settled for 1,2 billion dollars with the Federal Housing Finance Agency to dismiss the accusation that it had not adequately explained to investors the risks of the bonds linked to mortgages it had sold. In 2010 he had reached a 550 million dollar agreement with the Securities and Exchange Commission, the American Consob, again for violations related to mortgages.
The Bank has announced that the legal costs will negatively affect the profit for the fourth quarter 2015 for 1,5 billion dollars, after taxes. The accounts are expected next week.
