Washington, July 16: Investment bank Goldman Sachs will pay a record fine of USD 550 million to US market regulator SEC for settling charges related to misrepresentation of facts about a financial product tied to sub-prime mortgages.
"Goldman Sachs will pay USD 550 million and reform its business practices to settle SEC charges that Goldman misled investors in a subprime mortgage product just as the US housing market was starting to collapse," the Securities and Exchange Commission (SEC) said in a statement yesterday.
Sub-prime mortgages, where chances of defaults are high as loans are granted to borrowers with poor credit histories, were one of primary causes for the global financial crisis.
"Half a billion dollars is the largest penalty ever assessed against a financial services firm in the history of the SEC," SEC's Division of Enforcement Director Robert Khuzami said.