Goldman Sachs to pay record €425m to settle fraud case

EMBATTLED US bank Goldman Sachs will pay a record $550 million (€425m) to settle a US fraud probe, the Securities and Exchange Commission said yesterday.

Goldman faced civil charges filed by the SEC, which accused the company of defrauding investors about a financial product based on subprime mortgage-backed securities.

“This settlement is a stark lesson to Wall Street firms that no product is too complex, and no investor too sophisticated, to avoid a heavy price if a firm violates the fundamental principles of honest treatment and fair dealing,” said the SEC’s director of enforcement Robert Khuzami.

The SEC had claimed Goldman allowed a prominent hedge fund, Paulson & Co Inc, to help put together a package of subprime mortgages that were sold to clients, but which the fund was at the same time betting against.

In a statement the firm acknowledged “that the marketing materials for the ABACUS 2007-ACI transaction contained incomplete information.

“It was a mistake for the Goldman marketing materials to state that the reference portfolio was ‘selected by’ ACA Management LLC without disclosing the role of Paulson & Co Inc in the portfolio selection process.”

“Half a billion dollars is the largest penalty ever assessed against a financial services firm in the history of the SEC,” said Khuzami.


Hannah Stephenson has advice on how to care for your garden when wet weather strikesHow to prevent and deal with waterlogging in the garden

If you're down in the epidermal dumps, exfoliation, hydration and decongesting is what you need.The Skin Nerd: How to prep and pep that played-out January skin

The Winter Show, which gets underway in New York this Friday, is a celebration of world cultures, from antiquity to the present.Time travellers are packing their suitcases for New York this week

“Finish him!” It’s one of the most famous lines in video games – in fact, they pretty much built the entire series around it. Mortal Kombat is notorious for brutal finishing moves, in which the characters kill off their opponents in horrific (and often humourous) fashion.Game Tech: Mortal line lives on in the cinema

More From The Irish Examiner