Goldman Sachs Fined $650,000 by FINRA for Disclosure Delays
byNov 9th 2010 4:21PM
Goldman Sachs (GS) has been fined $650,000 by the Financial Industry Regulatory Authority for failing to properly disclose to regulators that two of its executives were going to be investigated by the Securities & Exchange Commission, FINRA announced Tuesday.
The investment bank filed documents in May 2010 that two of its employees, including notorious trader Fabrice Tourre, had received Wells Notices, about seven months after they had received the notices, FINRA said in a statement Tuesday. Wells Notices are the SEC's official device for informing people and companies that it intends to file charges against them.
Goldman received the fine because it didn't notify regulators within 30 days of receiving the Wells Notices. The company, which neither admitted nor denied the charges, also agreed to improve its reporting procedures, according to FINRA.
Goldman, in its own filing with the SEC on Tuesday, acknowledged the FINRA investigation. The company, along with Tourre, was accused in April by the SEC of trying to sell the collateralized debt obligation known as Abacus without disclosing that the hedge fund Paulson & Co., which had helped design it, was betting on the CDO's value to decline, The New York Times reported. Goldman agreed to pay $550 million in a July settlement with the SEC, although civil charges against Tourre are pending, according to The New York Times.