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Goldman Sachs to pay 550 million dollars to settle SEC charges

07-16-2010 08:13 BJT

WASHINGTON, July 15 (Xinhua) -- The U.S. Securities and Exchange Commission (SEC) announced Thursday that Wall Street bank giant Goldman, Sachs & Co. will pay 550 million dollars and reform its business practices to settle SEC charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse.

People walk out of the headquarters of Goldman, Sachs & Co. in this file photo taken on April 16, 2010 in New York, the United States. The U.S. Securities and Exchange Commission (SEC) announced on July 15, 2010 that Wall Street banking giant Goldman, Sachs & Co. will pay 550 million dollars and reform its business practices to settle the SEC charges that the company had misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse. (Xinhua/Shen Hong)
People walk out of the headquarters of Goldman, Sachs & Co. in this file photo 
taken on April 16, 2010 in New York, the United States. The U.S. Securities and 
Exchange Commission (SEC) announced on July 15, 2010 that Wall Street banking 
giant Goldman, Sachs & Co. will pay 550 million dollars and reform its business 
practices to settle the SEC charges that the company had misled investors in a 
subprime mortgage product just as the U.S. housing market was starting to collapse. 
(Xinhua/Shen Hong)

The fine is the largest penalty ever assessed against a financial services firm in the history of the SEC.

In agreeing to the SEC's largest-ever penalty paid by a Wall Street firm, Goldman acknowledged that its marketing materials for the subprime product contained incomplete information.

"This settlement is a stark lesson to Wall Street firms that no product is too complex, and no investor too sophisticated, to avoid a heavy price if a firm violates the fundamental principles of honest treatment and fair dealing," said Robert Khuzami, Director of the SEC Enforcement Division.

On April 16 this year, the SEC charged Goldman Sachs for " defrauding investors" over subprime mortgage securities which were largely blamed for the worst financial crisis since the Great Depression.

Editor:Zhang Jingya |Source: Xinhua

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