One of the world’s largest investment banks will have to pay more than half a million dollars for failing to adequately monitor trading activities – including cases of potential market manipulation.
The Financial Industry Regulatory Authority’s (FINRA) Department of Enforcement says that between February 2009 and April 2023, Goldman Sachs failed to include warrants, rights, units and certain OTC (over-the-counter) shares in nine surveillance reports intended to detect potential risks. cases of manipulative property and customer trading.
According to FINRA, Goldman failed to identify securities in the reports for an “extended period of time,” roughly between two and more than 12 years.
The regulatory agency found that Goldman omitted warrants from October 2010 through March 2021 and rights and units from October 2010 through April 2022 in a supervisory report designed to spot potential wash transactions.
FINRA also says the banking giant omitted from its surveillance reports from February 2009 to April 2018 warrants, rights, units and certain OTC stocks that would have flagged potential open- and close-marking practices — a market manipulation technique that is designed to influence the market. the price of an asset at the opening or closing of a trading session.
According to FINRA, the deficiencies in the reports prevented Goldman from conducting supervisory reviews for potential cases of market manipulation.
“The nine affected reports are said to have identified approximately 5,000 alerts (based on extrapolations of available data) for potentially manipulative trading activity in those securities from February 2009 through mid-April 2023.”
Due to the reporting deficiencies, Goldman agreed to a censure and a $512,500 fine without admitting or denying FINRA’s findings. The banking giant has also taken corrective action and included the missing trading data from April 2023 in its nine supervisory reports.
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