First Deutsche, then BNP, and now it’s Goldman’s turn to pay the Fed a token fee for making billions in manipulating the FX market from 2008 to 2013.
The Department of Financial Service announced on Tuesday that Goldman had agreed to pay the Federal Reserve $54.75 million, and an identical fine to the New York financial regulator, to settle claims that the bank allowed its foreign exchange traders to wrongly share customer information with traders from other global banks and engage in questionable conduct.
Furthermore, it appears that Goldman was the latest bank to participate in infamous FX rigging “chatoorms” which its traders used to discuss their positions on currency trades away from regulatory scrutiny.
The violation announced today stems from an investigation by DFS determining that from 2008 to early 2013, Goldman engaged in unlawful, unsafe and unsound conduct by failing to implement effective controls over its foreign exchange business.
Oddly enough, these years roughly coincide with Tom Stolper’s reign as Goldman’s undisputed “FX Gartman” when it comes to trading recommendations as Goldman’s undisputed “FX Gartman.Â
“The firm failed to detect and address its traders’ use of electronic chatrooms to communicate with competitors about trading positions,” the Fed said in a statement. The Fed said it was taking the action with the New York Department of Financial Services (NYDFS). Separately on Tuesday, Bloomberg reported that Goldman agreed to match the Fed’s fine to resolve the same allegations.
Having been caught manipulating the FX market, Goldman promised to do better and will “enhance internal controls and risk management” under the consent order. Translation: the rigging will continue, only this time no more chat rooms.
Full DFS Department of Financial Service announced :
DFS FINES GOLDMAN SACHS $54.75 MILLION FOR UNSAFE AND UNSOUND CONDUCT IN ITS FOREIGN EXCHANGE TRADING BUSINESS
