The U.K. Financial Conduct Authority fined Goldman Sachs International £34.3 million (U.S. $45 million) for failing to provide accurate and timely reporting relating to 220 million transaction reports between November 2007 and March 2017.
“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,” said FCA Executive Director of Enforcement and Market Oversight Mark Steward. “These were serious and prolonged failures.”
“We expect all firms will take this opportunity to ensure they can fully detail their activity and are regularly checking their systems so that any problems are detected and remedied promptly, unlike in this case,” Steward added.
Accurate and complete transaction reporting helps underwrite market integrity and supervise firms and markets. Specifically, transaction reports help the FCA identify potential instances of market abuse and combat financial crime.
According to the FCA’s final notice, Goldman Sachs failed to ensure it provided complete, accurate, and timely information in relation to approximately 213.6 million reportable transactions. It also erroneously reported 6.6 million transactions to the FCA which, were not, in fact, reportable. Altogether, over a period of more than nine years, Goldman Sachs made 220.2 million errors in its transaction reporting, breaching FCA rules.
The FCA also found that Goldman Sachs failed to take reasonable care to organise and control its affairs responsibly and effectively in respect of its transaction reporting. These failings related to aspects of GSI’s change management processes; its maintenance of the counter-party reference data used in its reporting; and how it tested whether all the transactions it reported to the FCA were accurate and complete.
Goldman Sachs agreed to resolve the case and so qualified for a 30 percent discount in the overall penalty. Without this discount, the FCA said it would have imposed a financial penalty of £49 million (U.S. $64 million).
The FCA’s fine against Goldman Sachs comes just two weeks after the FCA imposed a £27.6 million (U.S. $36.6 million) fine against UBS for failings relating to nearly 136 million transaction reports.