In the years leading up to the 2008 financial crisis, Goldman Sachs Group Inc. did some bad mortgage stuff. It bought risky mortgages from mortgage lenders, packaged them into mortgage-backed securities, understated the risks of those loans and the shoddiness of the underwriting in the offering documents for the securities, and sold them to investors. When the loans went bad, the investors lost money. This was a popular activity among a lot of banks in those years, and they all got in a lot of trouble for it.
The obvious first-order victims of this behavior were the investors who bought the mortgage-backed securities based on the banks’ misrepresentations. The specific thing that Goldman (and other banks) got in trouble for was lying about the quality of the mortgages that it sold to investors, for its “conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities.”