Goldman to pay $5.1 billion to settle mortgage-backed securities probe.

The firm will pay a $2.39 billion civil penalty, make $875 million in cash payments and provide $1.8 billion in consumer relief.

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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