Goldman to Pay $550M in Fraud Settlement

investment banking giant Goldman Sachs Group, Inc. agreed on Thursday to pay $550 million to the to settle a fraud lawsuit.
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Goldman to Pay $550M in Fraud Settlement
Lloyd Blankfein, chairman and CEO of The Goldman Sachs Group, testifies before the Senate Homeland Security and Governmental Affairs Investigations Subcommittee on Capitol Hill on April 27, 2010 in Washington, DC. (Mark Wilson/Getty Images)
7/15/2010
Updated:
10/1/2015

<a><img src="https://www.theepochtimes.com/assets/uploads/2015/09/sachx98707378.jpg" alt="Lloyd Blankfein, chairman and CEO of The Goldman Sachs Group, testifies before the Senate Homeland Security and Governmental Affairs Investigations Subcommittee on Capitol Hill on April 27, 2010 in Washington, DC. (Mark Wilson/Getty Images)" title="Lloyd Blankfein, chairman and CEO of The Goldman Sachs Group, testifies before the Senate Homeland Security and Governmental Affairs Investigations Subcommittee on Capitol Hill on April 27, 2010 in Washington, DC. (Mark Wilson/Getty Images)" width="320" class="size-medium wp-image-1817354"/></a>
Lloyd Blankfein, chairman and CEO of The Goldman Sachs Group, testifies before the Senate Homeland Security and Governmental Affairs Investigations Subcommittee on Capitol Hill on April 27, 2010 in Washington, DC. (Mark Wilson/Getty Images)
In the largest-ever Securities and Exchange Commission (SEC) fraud settlement case, investment banking giant Goldman Sachs Group, Inc. agreed on Thursday to pay $550 million to the to settle a fraud lawsuit that alleged the bank misled investors on the quality of subprime mortgage-backed securities.

The suit was related to the “ABACUS” series of collateralized debt securities, which Goldman securitized and sold in 2007, at the beginning of the subprime mortgage crisis. In a lawsuit dated April 16, SEC alleged that Goldman misled client ACA Management LLC. “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,” SEC Enforcement Director Robert Khuzami said in a statement published on the SEC website.