On Thursday, Goldman Sachs announced it would pay a record $5.1 billion in civil penalties and consumer relief for its role in causing the 2008 financial crisis. According to a Goldman Sachs press release the Too Big To Fail and Jail bank will pay a $2.385 billion civil monetary penalty, make $875 million in cash payments and provide $1.8 billion in consumer relief.
The payments will reportedly “resolve actual and potential civil claims by the U.S. Department of Justice, the New York and Illinois Attorneys General, the National Credit Union Administration (as conservator for several failed credit unions) and the Federal Home Loan Banks of Chicago and Seattle, relating to the firm’s securitization, underwriting and sale of residential mortgage-backed securities from 2005 to 2007.”
In other words, Goldman Sachs is all but admitting that it knowingly created and sold the fraudulent mortgage-backed securities (MBS) that led to the 08 crash. Goldman sold its financial time bombs all throughout the system and, when the bombs went off, the whole system came down with them leading to the Great Recession.
Goldman Sachs CEO Lloyd Blankfein is quoted in the release as saying he is “pleased” with the deal which is expected to only reduce Goldman’s third quarter profits by $1.5 billion after taxes.
As of now, there appear to be no plans for any of the individual corporate executives at Goldman Sachs to face criminal sanctions for the crimes that led to this $5.1 billion settlement despite the Department of Justice’s promise that it would start holding corporate criminals accountable. So far, DOJ is all talk and no action.
Goldman’s settlement for helping to cause the 2008 financial crisis parallels settlements from Citigroup, JPMorgan, and Bank of America. The case is clear: Wall Street, not poor people or homeowners, caused the 2008 financial crisis.
In the aftermath of the crisis Wall Street caused, the middle class has been hollowed out, with the US hitting a record amount of childhood poverty. The perpetrators, meanwhile, have been fully restored and are beating profit expectations. What a country.