Goldman Sachs Tower in Jersey City, NJ Goldman Sachs Tower in Jersey City, NJ

US banking giant Goldman Sachs will pay a $5.06 billion settlement over its role in the financial crisis in 2008, the US Department of Justice (DoJ) has said.

The payment settles a case of 'serious misconduct' relating to the sale of mortgage-backed securities between 2005 and 2007. The DoJ said Goldman Sachs mis-sold securities to investors by assuring them that the mortgages were solid, when they in fact knew many were likely to fail.

In a statement, acting associate attorney general, Stuart Delery, said: “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."

Goldman Sachs will pay $2.385bn in fines, $1.8bn in 'consumer relief', and a further $875 million in cash payments. Alongside Morgan Stanley, which earlier this year agreed a $3.2bn settlement, Goldman Sachs is the latest bank to settle a case of wrongdoing relating to the global financial crisis. Compared to others, however, Goldman Sachs and Morgan Stanley have got off lightly - in 2014, Bank of America agreed a $16bn settlement and JP Morgan Chase last year agreed a $13bn settlement.

Eric Schneiderman, New York attorney general and co-chair of the Residential Mortgage-Backed Securities Working Group, said: “Since 2012, my No1 priority has been getting New Yorkers the resources they need to rebuild.

“This settlement, like those before it, ensures that these critical programs … will continue to get funded well into the future, and will be paid for by the institutions responsible for the financial crisis.”