On Monday the Justice Department announced a $5.06 billion settlement with Goldman Sachs in connection to the Company's conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities between 2005 and 2007.
Goldman Sachs will pay $2.385 billion in a civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act and $1.8 billion in other relief, including relief to underwater homeowners, distressed borrowers and affected communities, in the form of loan forgiveness and financing for affordable housing. Goldman Sachs will also pay $875 million to resolve claims by other federal entities and state claims.
"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.
Settlements have also been reached with five other major financial institutions since 2012, J.P. Morgan Chase for $13 billion, Bank of America for $16.6 billion, Citibank for $7 billion and Morgan Stanley for $3.2 billion.
