Goldman Sachs & Co. was assessed a $6 million penalty by the Securities and Exchange Commission (SEC) as part of a settlement in which the financial institution admitted it submitted incomplete and inaccurate securities trading information affecting at least 163 million transactions.
The SEC said in a press release Friday it found 43 different types of errors impacting Goldman’s electronic blue sheets (EBS) reporting over a decadelong period. The agency acknowledged Goldman’s voluntary remedial efforts and self-reporting during the course of its investigation.
Goldman agreed to pay $6 million as part of a separate settlement with the Financial Industry Regulatory Authority (FINRA) for related conduct. FINRA’s order, the findings of which Goldman neither admitted nor denied, cited the firm for submitting nearly 25,000 inaccurate blue sheets and misreporting or failing to report at least 97 million transactions.
The details: From at least November 2012 through October 2022, Goldman submitted at least 22,192 deficient EBS reports to the SEC, according to the agency’s order. The submissions resulted in the misreporting of certain trade data for the 163 million transactions.
Issues found in the reports, per the order, included inaccurate or incomplete data regarding order execution times, transaction type identifiers, exchange codes, ticker symbols, and transaction prices. Goldman also failed to report certain cross trades, post-settlement cancels, and comprehensive historical data for certain option series, the SEC said. Other errors affected long sales reported as short and validation processes.
Goldman also provided EBS data with missing or inaccurate fields relating to firm or customer identifying information, an issue exacerbated by its reliance on an outdated reference table for EBS reporting.
Compliance considerations: Goldman did not detect errors in its EBS reporting because it did not have a reasonable process to verify accuracy, the SEC found.
“For example, Goldman did not conduct adequate periodic sampling, manual validation, and review of information received from third parties or have proper quality controls in place to ensure the completeness and accuracy of its EBS data prior to its submissions,” the agency said.
Before being notified by the SEC regarding the lapses, Goldman in 2018 began a program to improve its EBS reporting. The program remains ongoing but has already resulted in “significant supervisory control enhancements,” the SEC said. Goldman is continuing to remediate its final categories of EBS deficiencies and resubmit corrected reports to the commission.
“We are pleased to have resolved this matter,” a Goldman Sachs spokesperson said in an emailed statement.
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