Goldman Sachs Group has agreed to pay US$5.06 billion to resolve civil claims related to the firm’s securitization, underwriting and sale of residential mortgage-backed securities (RMBS) from 2005 to 2007.
The accord was reached with the US Justice Department, the New York and Illinois Attorneys General, the National Credit Union Administration and the Federal Home Loan Banks of Chicago and Seattle, Reuters reported, citing a company statement.
The bank will pay a US$2.385 billion civil monetary penalty, make US$875 million in cash payments and provide US$1.8 billion in consumer relief, according to the report.
The relief will come in the form of a reduction in unpaid principal for affected homeowners and borrowers, financing for construction and debt support, among other things.
The deal will cut Goldman’s fourth-quarter earnings by about US$1.5 billion after tax.
The Wall Street titan is due to report its quarterly results next week.
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