Goldman Sachs Fine 500 Million Dollars
Published / Last Updated on 14/07/2010
by Ashley Clark, Director
Global banking giant Goldman Sachs has been fined a record $550m for an alledged fraud.
The fraud, involving Royal Bank of Scotland as a key investor that suffered. In simple terms, special ‘institutional’ mortgage investments were set up by Goldman Sachs with the product designer then betting against the market instrument whilst Goldman Sachs itself promoted and sold the mortgage instruments globally to institutional investors such as ABN Amro Bank, owned by Royal Bank of Scotland.
The loss to RBS is around £0.5bn and compensation from the $550m fine of £60m is nowhere near the loss.
It is interesting how the US Government has been upfront with the BP disaster with requirements of full compensation estimated at over £20bn to be paid by BP yet when a US company caused global losses it levies, whilst a record, a fine that is just 10% of the losses suffered around the World.
Goldman Sachs made a profit of $3.5bn in the first three months of this year – why does the fine not fit the crime?
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