Goldman Sachs
Group Inc. said it agreed to settle a U.S. probe into its handling of
mortgage-backed securities for about $5.1 billion, cutting
fourth-quarter profit by about $1.5 billion.
The firm
will pay a $2.39 billion civil penalty, make $875 million in cash
payments and provide $1.8 billion in consumer relief under an agreement
in principle with a U.S. task force, according to a statement from the
bank Thursday. The deal would resolve claims from authorities including
the Department of Justice and New York and Illinois attorneys general.
A final resolution could still be weeks away. Morgan Stanley, which announced a proposed $2.6 billion agreement
with the Justice Department in February to end probes into its creation
and sale of mortgage-backed securities, has yet to resolve its case.
Justice Department spokesman Patrick Rodenbush declined to comment.
The accord
is part of a broader push by the government to hold more Wall Street
firms to account for the 2008 crisis. Authorities penalized the three
biggest U.S. banks—JPMorgan Chase & Co., Bank of America Corp. and
Citigroup Inc.—more than $37 billion in the form of cash and consumer
relief.
By: Bloomberg News.
Review: Emerging Market Formulations & Research Unit, Flagship Records.
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