Last thursday, Wall Street giant Goldman Sachs agreed with the Securities and Exchange Commission to pay $550 million to settle a fraud case. The regulators alleged that the firm misled investors into buying financial products that the firm knew were risky and unsuitable. The settlement is the largest the SEC has ever negotiated. Despite the size of the settlement, some observers believe this is simply a slap on the wrist and busines as usual will continue at Goldman Sachs and the other major Wall Street brokerage firms.
The SEC press release appears in its entirety below:
Goldman Sachs to Pay Record $550 Million to Settle SEC Charges Related to Subprime Mortgage CDO
Firm Acknowledges CDO Marketing Materials Were Incomplete and Should Have Revealed Paulson’s Role
FOR IMMEDIATE RELEASE
“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.”
Washington, D.C., July 15, 2010 — The Securities and Exchange Commission today announced that Goldman, Sachs & Co. will pay $550 million and reform its business practices to settle SEC charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse.
In agreeing to the SEC’s largest-ever penalty paid by a Wall Street firm, Goldman also acknowledged that its marketing materials for the subprime product contained incomplete information.
The attorneys at Colling Gilbert Wright and Carter assist investors who have been the victims of securities negligence and fraud. If you believe you have lost money due to broker negligence of fraud, please contact our offices for a free case evaluation. Thank you.