Goldman Sachs (NYSE:GS) has been fined $15 million for failing to make proper disclosures and communicate fairly to swap customers, the CFTC said.
The institution was also recently fined $3 million by the self-regulatory agency FINRA for marking short sales as ‘long’ sales in a timespan of three years.
Retail investors allege the fine is a pay to play agreement between the institutions and regulators stating that the profits made over the years substantially overwhelm the ‘slap on the wrist’ for the giant.
Now the Commodities Futures Trading Commission says Goldman Sachs “failed to communicate to clients in a fair and balanced manner based on principles of fair dealing and good faith,” in the latest scandal.
The institution is known in the industry for its manipulative and divisive strategies across various markets — all at the cost of everyday investors for self-gain.
In January, the fed launched an investigation to identify whether the business had appropriate safeguards in place as the bank ramped up lending.
Here’s what’s happening today.
Goldman Sachs Takes Advantage of Clients
(Reuters) Goldman Sachs has agreed to pay $15 million to settle U.S. Commodity Futures Trading Commission (CFTC) charges that it failed to make proper disclosures and communicate fairly to swap customers, the regulator said on Monday.
In 2015 and 2016, Goldman opportunistically sold clients on so-called “same-day” swaps at times that financially benefited the bank and hurt the customers, the CFTC said in a settled order.
As part of the settlement, the bank admitted it failed to disclose key information for nearly all “same-day” swaps executed in 2015 and 2016, according to the regulator.
Goldman “saw an opportunity” in buying or selling swaps when they were trading at a premium or discount to the projected settlement prices of certain equity indexes, the CFTC said.
The firm did not disclose key marks to customers for assessing the swap’s value and did not communicate to them in a fair and balanced manner, the regulator said.
Goldman Sachs declined to comment, per Reuters.
“The purpose of the CFTC’s Business Conduct Standards is to promote transparency and fairness in the swaps market.
The CFTC is committed to ensuring that swap dealers abide by these standards, so that swap counterparties receive disclosures allowing them to assess material aspects of the swaps before entering into them.
As today’s penalty against Goldman demonstrates, the CFTC will aggressively pursue swap dealers that violate these business conduct standards,” said Director of Enforcement Ian P. McGinley.
It seems the bank does not discriminate — investor or client, if they can squeeze an opportunity from either party, they will.
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About The Author
There needs to be much higher consequences for fraudulent activities.
I think most people would agree
Where do the fines go?
Great question – many people view these fines as ‘pay to play’ fees.
Leave your thoughts below.