Tag: Goldman Sachs Investigation

Goldman Sachs Fined $15 Million for Swap Violations

Market News Daily - Goldman Sachs Fined $15 Million for Swap Violations.
Market News Daily – Goldman Sachs Fined $15 Million for Swap Violations.

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

Market News Daily – Goldman Sachs Fined $15 Million for Swap Violations.

(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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Market News Today - Goldman Sachs Fined $15 Million for Swap Violations.
Market News Today – Goldman Sachs Fined $15 Million for Swap Violations.

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The Fed is Currently Investigating Goldman Sachs

Market News: The Fed launches an investigation into Goldman Sachs.
The Fed launches an investigation into Goldman Sachs | Goldman Sachs under investigation.

The U.S. Federal Reserve is probing whether Goldman Sachs Group Inc’s consumer business had appropriate safeguards in place as the bank ramped up lending, the Wall Street Journal reported on Friday, citing people familiar with the matter.

Shares of the investment bank were down nearly 3% at $341.08 in afternoon trade.

The central bank is concerned the Wall Street giant did not have proper monitoring and control systems inside Marcus, its consumer unit, as it grew larger, the report said.

The probe, which grew out of a standard Fed review of the business in 2021 and intensified into an investigation last year, is also examining instances of customer harm and whether they were properly resolved, the report added.

“The Federal Reserve is our primary federal bank regulator and we do not comment on the accuracy or inaccuracy of matters relating to discussions with them,” a Goldman spokesperson told Reuters.

Bloomberg News reported in September that the bank’s Marcus unit was facing a Fed review.

The probe would add to troubles for Goldman, which is executing a strategic pivot that includes refocusing on its core trading and investment banking business after losing money in its consumer banking venture.

“Another investigation into the consumer business makes Goldman’s foray into consumer look even worse, and can reduce management credibility, particularly given so many statements about GS’ ability to manage risk and build best-in-class platforms,” said Mike Mayo, banking analyst at Wells Fargo, in a note.

“The investigation, along with poor disclosure and other regulatory investigations, will increase the risk associated with owning GS and its cost of capital.”

Goldman’s credit card business is also being investigated by the Consumer Financial Protection Bureau (CFPB), the bank disclosed last year.

Source(s): Reuters.

Hedge Fund Investigations: Citadel Securities

Fed investigates Goldman Sachs, Citadel, and others in 2022 sweep.
Fed investigates Goldman Sachs, Citadel, and others in 2022 sweep.

Bloomberg confirmed in 2022 that Citadel Securities was one of the hedge funds under investigation by the Department of Justice.

Regulators took Morgan Stanely and several other hedge funds to court after several subpoenas were sent out earlier in the year.

Predatorial short selling strategies were exposed by the AMC and GME stock communities after the ‘meme stock’ frenzy fiasco in 2021.

Both these stocks’ share prices have been suppressed by dark pool trading, naked short selling, spoofing, and through OTC trading.

The hedge fund was being investigated after subpoenas were sent to numerous hedge funds and banks who might be connected.

Morgan Stanley and Goldman Sachs are two of the banks that were also ordered to court.

Among Citadel is a hedge fund by the name of Element according to the Bloomberg report.

Also Read: Citadel’s Ken Griffin Sues IRS for Leaking Financial Data

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