PENALTY

Goldman Sachs to Pay $5B Settlement

Goldman Sachs has agreed to pay $5.06 billion in a settlement regarding its sale of mortgage-backed securities prior to the 2008 recession, the Department of Justice announced on Monday. In a press release, the agency said that settlement is based on the company's conduct in its packaging, securitization, marketing and sale of residential mortgage-backed securities between 2007 and 2009. The company agreed to a list of facts provided by prosecutors detailing the "misleading" statements made by Goldman Sachs. An amount of $875 million will be set aside to address claims by the Illinois and New York attorneys general, the Federal Home Loan Banks of Chicago and Seattle, and the National Credit Union Administration. "Today’s settlement is yet another acknowledgment by one of our leading financial institutions that it did not live up to the representations it made to investors about the products it was selling,” one official said. According to the DOJ, investors lost billions of dollars through the securities bought during the time in question.