Goldman Sachs Pays $110 Million in Settlements

One of the largest investment banking enterprises in the world, Goldman Sachs Group Inc. is to pay $110 million in settlements after it was found that their traders in the foreign exchange were divulging information about their clients.

Confidential Client Information Shared

The DFS said that the traders discussed and coordinated trading activities that could affect currency prices and the deals could potentially manipulate the market.

Traders Used Code Names on Chat Rooms

The Dept. of Financial Services together with the Federal Reserve uncovered the activities from 2008 to 2013 in the forex unit of Goldman Sachs.

Using code names for some of the large investors, they chatted with other traders from various banks, picking up tips and finding out what other investors were doing in the forex markets.

It was discovered that in August 2008 a trader at Goldman shared confidential client information and wrote on a chat room that Satan (code name for client) sells 8 euros at 17.

That meant ‘Satan” was making a trade for $8 million, between euro currency and U.S. Dollars at a certain price.

Confidential Client Information Shared

According to a statement by the Federal Reserve the fine was imposed after it was found that Goldman Sachs neglected to address its traders communicating with competitors in chat rooms with reference to trading positions, benchmark fixes and disclosing confidential client information.

Even after a trader was written a letter by a Goldman supervisor back in 2009 telling him not to share with other forex trader’s confidential client information. In addition, the supervisor did not share his concerns with the compliance team at Goldman Sachs.

The Dep. Of Financial Services Board has ordered an improvement in Goldman’s compliance risk management for FX trading.

The Department of Financial Services will receive approximately $55 million and the Federal Reserve will also receive approximately $55 million in settlement.

Goldman Sachs was given a penalty in 2015 together with other banks for currency trading conduct for manipulating spot currency markets.

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