Goldman Sachs (Finally) Fesses Up To Defrauding Investors
Goldman Sachs has faced hefty legal settlements before, but the Justice Department’s announcement this week marked the first time the investment banking giant has had to acknowledge its pre-crisis MBS fraud.
The settlement is harsher than the recent string of similar ones—banks could “neither admit nor deny the charges”—but it’s unlikely to silence critics who’d like to see bankers face jail time.
"It is not acceptable that many young people have criminal records for smoking marijuana," presidential hopeful Bernie Sanders said recently, "while the CEOs of banks whose illegal behavior helped destroy our economy do not."
In January the Justice Department fined the bank $5.1B for its role in the 2008 housing meltdown, though complete settlement terms had yet to be decided, Fortune reports.
As part of Monday’s settlement, Goldman had to admit it knowingly misled investors about risks on mortgage-backed securities it packaged and sold in the lead-up to the financial crisis.
Since then, the company says it has taken "significant steps" to strengthen its culture, reinforce its commitment to clients, and ensure its "governance processes are robust.” [Fortune]