Goldman Sachs may pay $1bn to settle fraud charges

11 May 2010

Goldman Sachs may pay up to $1 billion to settle the allegations of fraud made against it, a newspaper report has claimed.

According to the Daily Telegraph, lawyers working on behalf of the investment bank have begun negotiations with the Securities and Exchange Commission (SEC) to agree on a settlement outside of court.

However, the news provider stated that certain analysts believe the financial services provider could receive a smaller penalty of approximately $150 million.

The SEC has accused the bank of committing fraud in relation to investment products tied to subprime mortgage securities.

Goldman Sachs has denied any allegations of wrong doing.

However, Lloyd Blankfein, Goldman Sachs chief executive officer, told shareholders at the annual meeting that a new panel is to be created within the bank to ensure good practices are adhered to.

The business standards committee will be part of a review of banking processes the institution is to undertake to allay shareholder concerns following the SEC’s allegations.

He said: “There is no bigger priority for our board of directors and management than to undertake a comprehensive review of all of our business practices.”

By Jim Ottewill

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