Goldman Sachs took time away from giving out secret loans to jumpstart Ted Cruz’s campaign to settle some business. Some criminal business. Having already made sure that no animals in business suits would be hurt as a result of their actions, Sachs needed to get out from numerous investigations into their terrible mortgages—the ones that helped create the bubble that broke our economy eight years ago.
It requires the bank to pay a $2.39 billion civil penalty and an additional $1.8 billion in relief to underwater homeowners and distressed borrowers, along with $875 million in other 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 Attorney General Stuart Delery said in a statement.
While $5 billion seems like a lot it really isn’t much in the scheme of things, and even less in comparison with other big financial powerhouses who have “settled” with the DOJ. There’s also the dirty, not so secret, that these financial institutions get to write off a considerable amount of these payouts for tax breaks. In the end, Goldman Sachs did what most of these financial institutions. They lied and withheld information from investors while they filled the housing market full of styrofoam peanuts and telling everyone is was gold bullion.
The bank admitted that it did not share with investors troubling information that it had received about the business practices of some loan originators, and that it falsely told investors that the loans had been checked to ensure that they met quality standards.
In reality, Goldman knew that significant percentages of the loans failed those standards, leaving investors likely to lose money on defaults, the Justice Department said.
Something isn’t nothing; but it’s starting to feel a lot like nothing.