The Goldman Sachs Group, Inc. GS has acknowledged several facts regarding how the Wall Street giant made “false and misleading representations” to potential investors about the quality of loans it securitized and also the manner in which it safeguarded the investors in its residential mortgage-backed securities (RMBS). The acceptance formed a part of the previously disclosed $5.1 billion settlement which was finalized on Monday.The U.S. Department of Justice mentioned in its release that investors incurred billions of dollars in losses as a result of investment in the RMBS issued and underwritten by Goldman in the period between 2005 and 2007.The settlement resolved the charges imposed on the bank for allegedly selling, securitizing or underwriting bonds, backed by RMBS to investors without disclosing the associated risks during the aforementioned period. Notably, the accord settled civil claims by the U.S. Department of Justice, the New York and Illinois attorneys general, the National Credit Union Administration and the Federal Home Loan Banks of Chicago and Seattle.Acting Associate Attorney General Stuart F. Delery stated, “This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail.”The banking giant will pay $1.8 billion of the total settlement amount to provide consumer relief, $875 million to resolve claims by various other federal and state entities and $2.385 billion as civil monetary penalty to the regulatory authorities.Michael DuVally, a Goldman spokesman, said "We are pleased to put these legacy matters behind us.” DuVally further added, "Since the financial crisis, we have taken significant steps to strengthen our culture, reinforce our commitment to our clients, and ensure our governance processes are robust."Tthe latest settlement is part of the efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group. The group has claimed huge amounts on behalf of consumers and investors from large financial institutions over misconduct related to the financial crisis.Notably, authorities have previously reached settlements with three major banks – Citigroup Inc. C, JPMorgan Chase & Co. JPM and Bank of America Corporation BAC. It was alleged that the banks sold shoddy mortgage backed securities to investors without disclosing the quality of the securities. In Nov 2013, JPMorgan reached a $13 billion settlement. This was followed by Citigroup’s mortgage accord of $7 billion in Jul 2014, while BofA announced a $17 billion accord the next month.Regulatory authorities are determined to put forward a landmark judgment to terminate wrong practices in the future, bring justice to the sufferers and punish the wrongdoers. While the settlement of such issues will put to rest a long-drawn investigation and bring reprieve to the banks, these are also likely to come as a huge blow to banks’ financials.Currently, Goldman carries a Zacks Rank #4 (Sell).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JPMORGAN CHASE (JPM): Free Stock Analysis Report CITIGROUP INC (C): Free Stock Analysis Report BANK OF AMER CP (BAC): Free Stock Analysis Report GOLDMAN SACHS (GS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research