Why did Goldman Sachs have to pay a fine of half a billion dollars in 2010?
A) It had underwritten most of the subprime mortgages during the real estate boom.
B) It had failed to document its business structure to the Securities and Exchange Commission.
C) It had knowingly sold toxic mortgage-based securities and then bet on their failure.
D) It had illegally financed the presidential campaign of Democratic president Obama.
E) It had failed to reform its management and business practice in the wake of the mortgage crisis.

Question

Quizplus · Accepted Answer

Goldman Sachs was fined $550 million in 2010 for selling toxic mortgage-backed securities to investors while also betting against those same securities, making a profit off of their failure. This practice is known as "shorting" and it was not disclosed to investors. This action was seen as a conflict of interest and a violation of the Securities Act of 1933.

Why Did Goldman Sachs Have to Pay a Fine of Half