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Goldman Sachs fined record $550m

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by Kay Mitchell
Goldman Sachs fined record $550m

The Securities and Exchange Commission (SEC) has fined US banking giant Goldman Sachs $550 million (£356 million).

The fine, which represents the largest against a financial company in the SEC’s history, comes as Goldman agreed to settle civil fraud charges over how it marketed a sub-prime mortgage product.

The UK’s Royal Bank of Scotland (RBS), lost around $840 million in investments due to its exposure in the matter and is set to receive $100 million compensation.

In addition, German bank IKB Deutsche Industriebank will receive $150 million, while the remaining will $300 million will go to the US Treasury.

However, many investors see the million dollar settlement as small change – in view of the $13 billion the bank earned last year.

“They pay $550 million and they get an $800 million pop in their stock price … they got off easy,” said Kevin Caron, a market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey.

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News posted: July 16, 2010

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