The U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority each fined Goldman Sachs $6 million Friday, for a total of $12 million, for providing them with incomplete and inaccurate data on millions of transactions over the last decade.
The Wall Street bank filed more than 22,000 deficient blue sheets, something firms submit to regulators to provide data on trades, with 43 different types of errors, according to the SEC. It filed almost 25,000 similarly deficient blue sheets to FINRA with 39 types of errors, the agency said.
The insufficient filings covered at least 163 million transactions and 97 million transactions, respectively, the regulators said.
Goldman also lacked the proper processes to confirm the accuracy of blue sheet submissions, according to the SEC; and the bank willfully violated federal securities laws.
"Firms must provide complete and accurate blue sheet data in response to our requests,” said Thomas Smith Jr., associate regional director in the New York Regional SEC office. “Blue sheet data is vital to the Commission’s ability to carry out its enforcement and regulatory functions and to protect investors and maintain market integrity.”
FINRA said that Goldman’s blue sheet errors caused the inaccurate reporting of information critical to FINRA’s regulatory function.
“For example, Goldman’s inaccurate reporting of information about options trades affected FINRA’s ability to determine whether an investor took on risk by opening an options position or reduced risk by closing an options position. Goldman misreported investors’ Taxpayer Identification Numbers, which affected FINRA’s ability to identify who might be involved in possible insider trading schemes,” FINRA wrote. “Goldman also reported inaccurate execution times of trades, a significant piece of information for investigations into insider trading and market manipulation that rely on determining exactly when trades occur.”
Goldman admitted to the SEC’s findings; and said in a statement to Bloomberg, “We are pleased to have resolved this matter.” The FINRA report indicates that Goldman accepted and consented, but did not admit to, FINRA’s findings.
The bank engaged in “remedial efforts to correct and improve its blue sheet reporting systems and controls,” the SEC said. A full review of its blue sheet reporting program led to the self-reporting of 29 of the 43 types of errors found in the SEC investigation, and to many of the types of errors found in the FINRA investigation.
Friday’s fines add to a slew of penalties regulators have hit Goldman with over the past year, including two by the Commodity Futures Trading Commission and one by the SEC last November over failure to follow environmental, social and governance policies and procedures.
