On May 1, Fed, DFS fined Goldman Sachs $110mn in FX trading.
- Goldman Sachs charged for unsafe, unsound practices, in FX trading business.
- Traders buy and sell currencies for the firm's own accounts and for customers.
- Dealing done through indirect subsidiaries, both in US and in overseas offices.
Alleged Violations
- Firm did not detect traders' use of chatroom to communicate with competitors.
- Traders discussed respective positions, fixes to benchmark, to increase profits.
- Firm failed to detect disclosures of client information by traders to other firms.
Expectations
- Feed expect strong governance of compliance risk at all levels of management.
- Policies and procedures, rigorous surveillance, escalation mechanisms, training.
Sanctions
- Both the Fed and NY DFS each fined Goldman $54.75mn for total of $109.5mn.
- Orders required firm to improve controls over FX compliance risk management.
- Policies for types of communications staff may use to communicate with others.
- Types of trade and confidential customer information that may be so disclosed.
- Conduct for responding to conflicts with customers that place execution orders.
- Compliance reporting for staff to report violations of policies, US law and rules.
- Training for staff in market activity, on policies and laws for job responsibilities.
