In the 10Q Goldman released today it says that the CFTC has plans to charge the firm.
The CFTC will recommend that the CFTC bring charges against Goldman related to a broker-dealer client whom Goldman should have known was executing trades for people other than the client.
(Possibly related: Goldman fires Kevin Connors.)
CFTC told Goldman that it planned to recommend that the CFTC charge Goldman and that the charges will be aiding and abetting, civil fraud and supervision-related.
Here’s what it says in Goldman’s 10Q about the CFTC charges:
The CFTC has been investigating the role of GSEC [Goldman Sachs Execution & Clearing) as the clearing broker for an SEC-registered broker-dealer client. The CFTC staff has orally advised GSEC that it intends to recommend that the CFTC bring aiding and abetting, civil fraud and supervision-related charges against GSEC arising from its provision of clearing services to this broker-dealer client based on allegations that GSEC knew or should have known that the client’s subaccounts maintained at GSEC were actually accounts belonging to customers of the broker-dealer client and not the client’s proprietary accounts.
Goldman Sachs is cooperating with the investigations and reviews.
Here’s what it says about the review of analyst emails:
Group Inc. and certain of its affiliates are subject to a number of investigations and reviews by various governmental and regulatory bodies and self-regulatory organisations relating to research practices, including communications among research analysts, sales and trading personnel and clients. The firm is in discussions with representatives of the Massachusetts Securities Division regarding potential administrative proceedings against the firm in connection with its practices relating to such communications, and other regulators, including the SEC and FINRA, have been investigating similar matters. Goldman Sachs is cooperating with the investigations and reviews.
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