Goldman Sachs & Co. has agreed to pay $550 million to settle civil fraud charges that accused the Wall Street giant of misleading buyers of mortgage-related investments.
The deal calls for Goldman to pay the Securities and Exchange Commission fines of $300 million. The rest of the money will go to compensate those who lost money on the investments.
The investments at the center of the charges were crafted with input from a Goldman client who was betting on them to fail. The securities cost investors close to $1 billion while helping Goldman client Paulson & Co. capitalize on the housing bust.
The civil charges the SEC filed April 16 were the most significant legal action related to the mortgage meltdown that pushed the country into recession.
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