Categories Finance, LATEST, Markets

Goldman Sachs fined $110 million in Forex probe

Goldman Sachs Group Inc. (GS) has been fined $110 million over illegal information sharing by its Forex traders regarding client orders. The bank’s foreign exchange traders allegedly shared confidential information of customer currency orders in chat rooms with traders from other banks, despite being warned against it.

The company will have to pay $55 million each to the Federal Reserve and New York’s Department of Financial Services (DFS). It will also have to present its plans for improving internal controls and compliance measures to the authorities.

The investigation was focused on Forex activities from 2008 to 2013. Traders used code names such as ‘Satan’ and ‘Fiddler’ to refer to large clients while disclosing information on their deals with other traders. It is inappropriate to reveal customer information because revealing the details of transactions could lead to manipulation on the market.

Traders used code names such as ‘Satan’ to refer to clients

The Federal Reserve blamed Goldman Sachs for being lax in detecting and preventing these activities by their traders and for failure in protecting customer information. The DFS said that although a salesperson at Goldman Sachs issued a warning to one of the traders against sharing confidential information, the salesperson did not convey the matter to higher officials.

Goldman Sachs joins several other banks who were similarly penalized for currency manipulation. The amount Goldman has to pay is lesser compared to others such as Barclays. Goldman also does not need to bring in an external consultant to review its compliance practices. Goldman stated that it has taken significant steps to enhance its policies and procedures.

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