Goldman Sachs accepts multi-million-pound fine for legal failures

The Financial Conduct Authority (FCA) has fined the global investment and financial services company Goldman Sachs more than £34 million for failing to provide “accurate and timely reporting” relating to some 220 million transactions.

The rules relating to the reporting of transactions were introduced in 2008 in an effort to avoid market abuse and future financial crashes.

Handing down the fine this week, the financial watchdog said: “The failings in this case demonstrate a failure over an extended period to manage and test controls that are vitally important to the integrity of our markets”.

Over a period of nine and a half years between November 2007 and March 2017, it was revealed that Goldman Sachs International (GSI) – which has offices in London, New York and Hong Kong – failed to ensure it provided “complete, accurate and timely information” in relation to around 213.6 million legally reportable transactions.

Likewise, the FCA said the international group also failed to take “reasonable care” to “organise and control its affairs responsibly and effectively in respect of its transaction reporting”.

The regulator said these failings related to GSI’s “change management processes”, its “maintenance of the counterparty reference data” and how it tested that its transactions were reported to the FCA accurately.

Commenting on the case, the FCA said: “Accurate and complete transaction reporting helps underwrite market integrity and supervise firms and markets”.

“In particular, transaction reports help the FCA identify potential instances of market abuse and combat financial crime,” it added.

Mark Steward, FCA Executive Director of Enforcement and Market Oversight, described GSI’s failures as “serious and prolonged”.

“We expect all firms will take this opportunity to ensure they can fully detail their activity and are regularly checking their systems so any problems are detected and remedied promptly, unlike in this case,” he said.

In a statement, a Goldman Sachs spokesperson said it was “pleased to have resolved this legacy matter”.

“We dealt with the issues proactively at the time and have made significant investments across the period to develop and enhance our reporting procedures.”

GSI’s substantial fine is not the first for London’s booming financial centre. Earlier this year, Swiss investment bank UBS was fined £27.6 million for reporting failures, while Merrill Lynch, a subsidiary of the Bank of America, was fined £35 million for similar failures.