Once again the Obama Department of Justice has reached a settlement with a To Big To Fail Bank for pennies on the dollar and let the perpetrators walk away without criminal sanctions or penalties.
Goldman Sachs will pay $5.06bn for its role in the 2008 financial crisis, the US Department of Justice said on Monday. The settlement, over the sale of mortgage-backed securities from 2005 to 2007, was first announced in January. [..]
In January, Goldman said it expected the agreement to reduce its earnings for the fourth quarter by about $1.5bn after tax. According to the Wall Street bank, the settlement will consist of a $2.385bn civil monetary penalty, $875m in cash payments, and $1.8bn in consumer relief.
Among other measures, the bank will offer a reduction in unpaid principal for affected homeowners and borrowers. [..]
This is only the latest multibillion-dollar civil settlement reached with a major bank over the economic meltdown in which millions of Americans lost their homes to foreclosure.
Goldman Sachs and Morgan Stanley, which earlier this year agreed to pay $3.2bn, are two of the last big banks to pay up. Bank of America agreed to pay the largest of the settlements, $16.6bn, in 2014. A year earlier, JPMorgan Chase paid about $13bn.
Such settlements have been worked out by the Residential Mortgage-Backed Securities Working Group, which is co-chaired by New York’s attorney general, Eric Schneiderman.
New Yorkers will receive about $670m of the Goldman Sachs settlement, including $190m in cash and $480m in consumer relief such as mortgage assistance and principal forgiveness.
Goldman Sachs stocks rose two percent following the settlement announcement.