高盛化钱“息事宁人”
Goldman Pays $550 Million to Settle Fraud Case
WASHINGTON — The investment giant Goldman Sachs agreed Thursday to pay $550 million to settle federal claims that it misled investors in a subprime mortgage product as the housing market began to collapse three years ago.
If approved by a federal judge in Manhattan, the fine by the Securities and Exchange Commission would be only a dent in the balance sheet of Goldman, which earned $13.3 billion last year.
Goldman, which had been under pressure from shareholders to resolve pending investigations, did not admit wrongdoing under the terms of the agreement.
Even so, the settlement is a blow for Goldman, whose lucrative and elite reputation endured through the financial crisis, only to be battered by a series of high-profile investigations that shed light on the web of potential conflicts of interest that bound the bank to investors and to the now-stricken housing market.
“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,” the S.E.C.’s enforcement director, Robert S. Khuzami, said.
The suit focused on a single mortgage security that Goldman created in 2007, just as cracks appeared in the housing market. That security, called Abacus 2007-AC1, allowed a prominent hedge fund manager, John A. Paulson, to place a negative bet against mortgage bonds. The S.E.C. said that Goldman misled investors in the deal, who were betting the housing market would improve, that Mr. Paulson had helped design the deal.
As part of the settlement, Goldman said that it should have disclosed Mr. Paulson’s role and that the marketing materials for Abacus “contained incomplete information.”
“We believe that this settlement is the right outcome for our firm, our shareholders and our clients,” Goldman said in a statement.
The settlement awaits approval by Judge Barbara S. Jones of the Federal District Court in Manhattan. A year ago, the S.E.C. suffered a black eye when a different federal judge in Manhattan rejected a settlement between the commission and Bank of America. The commission settled with that bank later on, substantially increasing the fine amount.
Under the proposed settlement, $250 million would be returned to investors through a distribution program known as Fair Fund while $300 million would be paid to the United States Treasury.
The settlement also requires Goldman to make changes in how it reviews and approves offerings of certain mortgage securities.
But some observers said they thought the settlement was not high enough.
“To put the Goldman settlement in perspective, the $300 million payment to the Treasury represents less than 3 percent of Goldman’s take from the U.S. taxpayers as a result of the A.I.G. bailout,” said Cornelius K. Hurley, director of the Morin Center for Banking and Financial Law at Boston University. “One would hope that Judge Jones will keep the proportions in mind as she considers the settlement agreement between the S.E.C. and Goldman.”
Goldman was not the only Wall Street firm to create complex mortgage securities that allowed investors to make negative bets, and the commission continues to look at other deals. Goldman said in its statement that it understands that the S.E.C. has reviewed its other deals and does not plan to file additional cases.
Fabrice P. Tourre, the Goldman vice president also named in the case that was filed in April, was not involved in the settlement. Mr. Tourre took a leave from Goldman after the S.E.C. case was filed. When he appeared before a Senate committee in April, he said he should have pointed out Mr. Paulson’s involvement in Abacus in the deal’s marketing materials.
S.E.C. officials said the timing of the settlement — which Goldman and the S.E.C. signed on Wednesday — was unrelated to the final adoption, hours earlier, of sweeping legislation to rewrite the rules of Wall Street.
“Let me personally assure you there’s absolutely no consideration to those kinds of external events in deciding what cases of to bring, how we bring them, and when we bring them,” Mr. Khuzami said at a news conference at the S.E.C. headquarters here.
Sewell Chan reported from Washington and Louise Story from New York.
