Goldman to pay $550M for mortgage fraud

Goldman Sachs has agreed to pay $550 million to the Securities and Exchange Commission to settle charges of securities fraud linked to mortgage investments, the New York Times reported. Under the settlement — the largest penalty ever paid by a Wall Street firm — Goldman will pay $300 million in fines to the Treasury Department, with the rest serving as restitution to investors in the mortgage-linked security. Goldman will not admit wrongdoing, according to the agreement, though it will concede that its marketing materials for the investment “contained incomplete information,” according to a press release from the SEC. Goldman will also change several business practices, including the way it draws up marketing materials for complex mortgage securities and the way it educates employees. The settlement must still be approved by Judge Barbara Jones of Manhattan’s Federal District Court. [NYT]

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