Tester statement on Goldman Sachs settlement

(BIG SANDY, Mont.) – Senator Jon Tester today released the following statement in response to Goldman Sachs’ record payment of $550 million to settle charges from the Securities and Exchange Commission that Goldman misled investors prior to the collapse of the U.S. housing market.

“Settling fraud charges by writing a check for more than half a billion dollars, in my opinion, says an awful lot about Goldman Sachs’ role in the financial crisis.  This settlement fulfills a certain responsibility of doing right by folks who got the short end of the stick.  All Americans deserve answers and accountability from any Wall Street firm that relied on taxpayer dollars to stay afloat.  With Wall Street reform passing this week, we’ll be better able to hold those companies accountable.”

News of Goldman Sachs’ settlement came just minutes after the Senate passed the Wall Street Reform Act Thursday.

The company admitted it did not give investors enough information about a complex financial product called a synthetic collateralized debt obligation (CDO).  Goldman Sachs was accused of intentionally designing certain CDOs to fail, selling them, then betting against them and their clients to make a profit.

Of the $550 million settlement, $300 million will go back to the Treasury to reduce the national debt.  Another $250 million will be returned to harmed investors.

In April, Tester questioned Goldman Sachs CEO Lloyd Blankfein about his company’s 2008 taxpayer-funded bailout.  In response, Blankfein admitted receiving bailout money was an “embarrassing situation.”

Tester, a member of the Senate Banking Committee, is the only Senate Democrat who voted against the bailouts of Wall Street and the U.S. auto industry.