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| July 19, 2010: Goldman Sachs reached a $550 million settlement on Thursday, July 15, 2010, with the U.S. Securities and Exchange Commission (SEC), and the company will be required to reform its business practices, according to The Hill. The settlement is the largest in SEC history, officials said on July 15. The SEC filed a lawsuit in April, 2010, alleging that Goldman misled investors with a subprime mortgage product as the housing market was declining. Goldman is prohibited from deducting the settlement from its taxes, SEC officials confirmed. Goldman has agreed to cooperate in the SEC's continuing investigation into Fabrice Tourre, a vice president at the firm involved in the mortgage deals. That case is ongoing. As part of the deal, Goldman acknowledges that the marketing materials for the ABACUS transaction "contained incomplete information." Specifically, "it was a mistake for the Goldman marketing materials to state that the reference portfolio was 'selected by' ACA Management LLC without disclosing the role of Paulson & Co. Inc. in the portfolio selection process and that Paulson's economic interests were adverse to CDO investors," according to the settlement document. "Goldman regrets that the marketing materials did not contain that disclosure," the settlement said. |
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