By Yepoka Yeebo
DNAinfo Reporter/Producer
MANHATTAN — Goldman Sachs has agreed to pay a record $550 million to settle a civil fraud suit by the Securities and Exchange Commission.
The firm will not admit it did anything wrong as part of the settlement, but will pay a penalty that is the largest ever paid by a Wall Street firm, the SEC said Wednesday.
$300 million of the fine will be paid to the SEC, and the rest of the sum will serve as restitution, the New York Times reported.
In April, the SEC filed the law suit accusing the investment bank of misleading investors about the way mortgage-backed investments were selected.
Goldman was accused of lying to investors and telling them prominent hedge fund manager John A. Paulson was betting on a mortgage-backed investment vehicle going up, when in fact he was shorting it.
Paulson was never named in the suit.
Goldman's stock prices increased by more than $5 in the last half hour of trading, after the SEC said there would be a significant announcement.
