via: SGT Report

Goldman Sachs—once described as “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”—has agreed to pay $5.1 billion to settle a U.S. probe into allegations that it misled mortgage bond investors during the financial crisis, the U.S. Justice Department (DOJ) said Monday.

The penalty was swiftly denounced as a “non-punishment, non-accountability ritual that will do nothing to stop the Wall Street crime spree.”

The settlement relates to the investment firm’s “conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2005 and 2007,” according to a DOJ statement.

The proliferation of such sub-prime mortgages is widely credited with triggering the collapse of the housing market and sending the financial credit markets into a tailspin in the summer and fall of 2008.

“This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” said Acting Associate Attorney General Stuart F. Delery.

The International Business Times reports:

From 2005 to 2007, Goldman took part in the gold rush for mortgage products, packaging large pools of home loans into securities. Issuers like Countrywide provided thousands of mortgages for Goldman to review before selling to clients as safe investments.

But a statement of facts prepared by regulators and affirmed by Goldman shows that the bank did not always live up to its promises to investors — to carefully review loans and screen out mortgages deemed risky. As the government and Goldman have now agreed, “significant percentages of the loans reviewed did not conform to the representations made to investors.”