BP #12: Goldman Sachs Will Pay Much Less Than Advertised

According to state and federal officials on Monday, Goldman Sachs will be paying $5.1 billion to settle accusations of wrongdoing before the financial crisis of 2008. However, in the fine print of the deal there are provisions that allow Goldman to pay as much as $1 billion less than the headline figure, and this is before the tax benefits of the deal are included. This is from credit being added for every payment that helps consumers, plus the tax deductions that will be increased due to the spending Goldman Sachs will be making on consumer relief. These types of provisions occurred in the deals cut with all the banks that inflated the mortgage bubble, however, what makes this deal special is that Goldman Sachs has gained much larger concessions in their deal than other banks before them.

By advertising the fine that Goldman Sachs will pay will be $5.1 billion, people are falsely led to believe that it will be paid in full and that justice will be served. At the same time, Goldman will pay much less and escape their punishment relatively unscathed. This is an example of deception as there is a withholding of information and in this case it would be malicious as this is in no one’s best interests besides Goldman Sachs. According to Ellin, this deception only harms the public’s interest if the public draws an inference grounded on what they have been told. When stating that Goldman Sachs would pay $5.1 billion, state and federal officials are assuming the public will infer that this will actually be the case. As this is a case of deception, it is therefore morally wrong and unethical. The actual, calculated fine that Goldman Sachs will pay should be given in order for the public to determine whether this is an adequate amount.

Goldman Sachs to Pay 5.1 Billion in Mortgage Settlement

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s