US - Investment banking giant Goldman Sachs will pay a record US$550m fine to settle the SEC's fraud probe into mortgage-backed securities.
Goldman faced civil charges filed by the Securities and Exchange Committee, which accused the bank of defrauding investors in a sub-prime financial product.
"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," the SEC's director of enforcement Robert Khuzami says.
"Half a billion dollars is the largest penalty ever assessed against a financial services firm in the history of the SEC."
RBS, one of the largest investors in the Abacus scheme, will receive $100m from the fine. It lost about $840m in the security.
The SEC claimed Goldman allowed hedge fund star John Paulson's Paulson & Co. to help put together a package of sub-prime mortgages to be sold to clients, but shorted by the manager.
Goldman executives, led by chief Lloyd Blankfein, vehemently denied all the allegations of fraud.
However, the firm acknowledges "the marketing materials for the ABACUS 2007-ACI transaction contained incomplete information".
In May, Goldman detailed five lawsuits and an ammended suit brought by pension funds and other investors after the SEC launched its civil suit.
In an SEC filing, the company said the suits "generally alleg(e) claims for breach of fiduciary duty, corporate waste, abuse of control, mismanagement and unjust enrichment in connection with collateralized debt obligation offerings made between 2004 and 2007, and challenging the accuracy and completeness of GS Inc.'s disclosure". (Global Pensions; May 5, 2010)
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Royal Bank of Scotland (RBS) faces a £102m impact on liabilities as a result of equalising guaranteed minimum pensions (GMPs), according to its annual results.
Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point