Goldman Sachs Group Inc. will pay $3 million to settle a US regulator’s allegations that its internal controls failed to prevent a potentially disruptive futures trade, and that the firm didn’t properly disclose the issues to the agency.
The US Commodity Futures Trading Commission on Friday faulted Goldman’s surveillance of a customer’s large position in an oil futures contract in late December 2017. The CFTC said that one of Goldman’s automated internal controls malfunctioned and didn’t properly suspend the transaction.
A Goldman post-trade surveillance system had an error and wasn’t able to correctly flag potentially disruptive trades. Later, the firm omitted key information about the issues in responding to questions from the agency’s enforcement unit about how the firm had handled the client’s orders, according to the regulator.
“The CFTC takes very seriously the role of registrants’ supervisory obligations to detect and prevent disruptive trading and to maintain the integrity of the futures markets,” Ian McGinley, who runs the enforcement unit, said in a statement.
A representative for Goldman, which didn’t admit or deny the allegations as part of the settlement, didn’t immediately respond to a request for comment sent outside of normal business hours.
The CFTC’s case against Goldman follows a separate settlement with the Securities and Exchange Commission this week in which the Wall Street giant agree to pay $6 million for sending incomplete trading data to that regulator.
--With assistance from Sridhar Natarajan.
