Goldman Sachs agreed Monday to pay $5 billion to settle state and federal investigations into the investment bank's sale of residential mortgage-backed securities ahead of the 2008 financial crisis, the Justice Department said. The deal requires the bank to pay a $2.4 billion civil penalty and $1.8 billion to homeowners and other borrowers affected by the housing crisis. The other $875 million will go towards resolving claims by the New York and Illinois attorneys general, the National Credit Union Administration, and the Federal Home Loan Banks of Chicago and Seattle.
"This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail," Acting Associate Atty. Gen. Stuart Delery said in a statement. However, the deal does not include any criminal sanctions or penalties, nor does it hold any individual bank employees responsible.
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