By Eric Zimmermann - 07/20/10 06:02 PM EDT
Goldman Sachs posted quarterly earnings on Tuesday 82 percent lower than the same period last year, due in part to massive fines and fees in the United States and United Kingdom.
The firm settled a civil fraud suit with the SEC last week, agreeing to pay a $550 million fine, the largest in history. The half-billion-dollar hit was coupled with a $600 million bonus tax in the U.K., leaving Goldman with quarterly profits of $613 million.
That’s down from $3.4 billion in the same quarter last year.
The SEC fine stemmed from accusations that Goldman Sachs had duped investors into supporting an investment that was “designed to fail.”
“This settlement is a stark lesson to Wall Street firms that no product is too complex, and no investor too sophisticated, to avoid a heavy price if a firm violates the fundamental principles of honest treatment and fair dealing,” Robert Khuzami, director of the SEC’s Division of Enforcement, said when announcing the settlement.
Critics suggested the suit against Goldman, announced in April, was a political calculation to build support for financial reform. The Obama administration said the timing was coincidental.