Goldman Sachs fined for trading violations
Goldman Sachs agreed Tuesday to pay a combined US$109.5 million in fines to federal and New York state authorities to settle charges that the investment bank's currency traders unlawfully shared customers' order information with other banks in order to take advantage of the market.
Goldman is the latest big bank ensnared in a multiyear scandal where currency traders at major Wall Street firms got caught using electronic chat rooms to talk about their customers' orders. By sharing customer order information, traders were able to distort the US$5.3 trillion foreign exchange market to their benefit. The traders used nicknames like "the cartel" to describe their illegal activities. Many big banks were fined for their participation in the trading scandal, including JPMorgan Chase, Citigroup, HSBC and Barclays. And Goldman had been one of the few remaining banks to reach an agreement over its own participation.
Goldman will pay US$54.75 million to the New York State Department of Financial Services and an equal amount to the Federal Reserve. In addition, the New York bank will have to put in place additional compliance and oversight controls on its operations to stop this from happening again.