Goldman Sachs Fined $110 Million to Settle New York FX Probe
- Goldman's traders shared confidential information about FX orders placed by a customer referred to as “Satan.”
Goldman Sachs has been slapped with a $110 million fine by New York regulator and Federal Reserve in an antitrust lawsuit alleging that the bank’s traders routinely manipulated the Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term market for their profit.
New York’s Department of Financial Services also ordered the investment bank to put in place a program to ensure that the alleged violation doesn’t happen again. However, Goldman is not required to hire an outside consultant to review its practices, a condition sometimes imposed on banks fined for compliance violations.
The DFS said Goldman Sachs had insufficient oversight and controls over its FX traders, who allegedly discussed trading positions with competitors, using electronic chatrooms. The traders frequently tried to trade ahead of big foreign-Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term transactions by their clients, a practice known as front-running.
The order released Tuesday detailed multiple instances of improper behavior, which occurred from at least 2008 to 2015.
In one example cited by DFS, Goldman Sachs’s traders shared confidential information about foreign exchange orders placed by a customer referred to as “Satan.” One of the bank’s employees wrote, “Satan sells 8 euros at 17,” which indicated that the client was making an $8 million trade on EUR/USD pair at a specific price.
Elsewhere, traders in the bank used a tactic called ‘building ammo,’ where they improperly shared customer information on trading certain currency pair to ensure that they were not taking positions that would hurt one another.
Tuesday’s action is the latest step taken by the US authorities as part of a long-running crackdown on price-fixing across FX markets, in which several lenders have already pleaded guilty to conspiring to manipulate currency prices.
Other banks have also faced large fines for allowing their traders to club together to rig prices in FX markets. Last year, five banks – Credit Suisse, Barclays, Royal Bank of Scotland, Citigroup and JP Morgan Chase – pleaded guilty to conspiracy to rig the foreign exchange market and fines totaling $5.8 billion were handed down by the US Department of Justice.
Maria Vullo, superintendent of the DFS, commented: “DFS’s investigation revealed that certain Goldman traders exploited the company’s ineffective oversight of its foreign-exchange business by improperly sharing customer information.”
Goldman Sachs has been slapped with a $110 million fine by New York regulator and Federal Reserve in an antitrust lawsuit alleging that the bank’s traders routinely manipulated the Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term market for their profit.
New York’s Department of Financial Services also ordered the investment bank to put in place a program to ensure that the alleged violation doesn’t happen again. However, Goldman is not required to hire an outside consultant to review its practices, a condition sometimes imposed on banks fined for compliance violations.
The DFS said Goldman Sachs had insufficient oversight and controls over its FX traders, who allegedly discussed trading positions with competitors, using electronic chatrooms. The traders frequently tried to trade ahead of big foreign-Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term transactions by their clients, a practice known as front-running.
The order released Tuesday detailed multiple instances of improper behavior, which occurred from at least 2008 to 2015.
In one example cited by DFS, Goldman Sachs’s traders shared confidential information about foreign exchange orders placed by a customer referred to as “Satan.” One of the bank’s employees wrote, “Satan sells 8 euros at 17,” which indicated that the client was making an $8 million trade on EUR/USD pair at a specific price.
Elsewhere, traders in the bank used a tactic called ‘building ammo,’ where they improperly shared customer information on trading certain currency pair to ensure that they were not taking positions that would hurt one another.
Tuesday’s action is the latest step taken by the US authorities as part of a long-running crackdown on price-fixing across FX markets, in which several lenders have already pleaded guilty to conspiring to manipulate currency prices.
Other banks have also faced large fines for allowing their traders to club together to rig prices in FX markets. Last year, five banks – Credit Suisse, Barclays, Royal Bank of Scotland, Citigroup and JP Morgan Chase – pleaded guilty to conspiracy to rig the foreign exchange market and fines totaling $5.8 billion were handed down by the US Department of Justice.
Maria Vullo, superintendent of the DFS, commented: “DFS’s investigation revealed that certain Goldman traders exploited the company’s ineffective oversight of its foreign-exchange business by improperly sharing customer information.”