FINRA Fines Goldman Over Inadequate Surveillance Reports

FINRA fines Goldman Sachs $500,000+ over charges the firm failed to include millions of securities in 9 manipulation surveillance reports for over a decade.

Key Insights

  • FINRA fines Goldman Sachs over $500,000 for inadequate trading surveillance from 2009-2023
  • Goldman failed to include millions of securities across 9 reports to detect manipulation
  • Firm only updated reports after FINRA investigation began

NEW YORK (MarketsXplora) – Wall Street powerhouse Goldman Sachs Group Inc (GS.N) has agreed to pay over $500,000 in fines to settle charges of inadequate oversight of securities trading over more than a decade, U.S. regulators said on Tuesday.

The Financial Industry Regulatory Authority (FINRA) said Goldman failed from 2009 to April 2023 to include millions of warrants, rights, and other securities across nine surveillance reports designed to spot potentially manipulative trading.

Goldman only updated the reports after FINRA launched its investigation, the brokerage watchdog said.

As a result, Goldman was unable to adequately supervise the trading of the excluded securities – which ranged from warrants to over-the-counter equity instruments – for over a decade.

“The firm failed to detect that nine surveillance reports for potentially manipulative trading excluded (various securities types),” FINRA said. “By failing to have a reasonably designed supervisory system, Goldman violated NASD Rule 3010 and FINRA Rules 3110 and 2010.”

Goldman Sachs consented to a censure and a $512,500 fine over charges its policies and procedures were not reasonably designed, FINRA said.

Alongside its strong trading and capital markets businesses, Goldman also operates Marcus – its consumer and wealth management arm – as it aims to diversify revenue.

The bank’s asset management unit oversees over $2 trillion worth of investments out of its New York headquarters.

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