Winehole23
05-11-2011, 03:15 PM
Goldman Sachs Group Inc. (GS) said in its quarterly regulatory filing the Commodity Futures Trading Commission is investigating its Goldman Sachs Execution and Clearing division's role as clearing broker for an unnamed SEC-registered broker dealer. The agency has orally advised Goldman it intends to bring aiding and abetting, civil fraud and supervision-related charges against the Goldman operation related to its clearing services for this broker-dealer.
The CFTC, the filing said, is basing these charges on allegations Goldman knew or should have known that the client's subaccounts at Goldman were accounts belonging to customers of the broker-dealer and not the broker-dealer's own accounts. The filing says Goldman is cooperating with the investigations.
The Justice Department is also reviewing matters similar to a European Commission investigation initiated last month into the supply of data related to credit default swaps and fee arrangements for clearing of credit default swaps, including potential anti-competitive practices, the filing said.
New government probes into its activities come after a rough year for Goldman on the public relations front. Last year it paid $550 million--the biggest SEC fine ever paid by a Wall Street bank--to settle charges it misled customers in the sale of a complex mortgage derivative. Goldman initiated an extensive review of its business practices as a result of those allegations.
Goldman reduced its worst-case estimate for litigation losses related to products it underwrote to $2.7 billion from $3.4 billion, according to its quarterly regulatory filing. http://www.dowjones.de/site/2011/05/goldman-cftc-probing-firms-role-as-clearing-broker-for-client.html
The CFTC, the filing said, is basing these charges on allegations Goldman knew or should have known that the client's subaccounts at Goldman were accounts belonging to customers of the broker-dealer and not the broker-dealer's own accounts. The filing says Goldman is cooperating with the investigations.
The Justice Department is also reviewing matters similar to a European Commission investigation initiated last month into the supply of data related to credit default swaps and fee arrangements for clearing of credit default swaps, including potential anti-competitive practices, the filing said.
New government probes into its activities come after a rough year for Goldman on the public relations front. Last year it paid $550 million--the biggest SEC fine ever paid by a Wall Street bank--to settle charges it misled customers in the sale of a complex mortgage derivative. Goldman initiated an extensive review of its business practices as a result of those allegations.
Goldman reduced its worst-case estimate for litigation losses related to products it underwrote to $2.7 billion from $3.4 billion, according to its quarterly regulatory filing. http://www.dowjones.de/site/2011/05/goldman-cftc-probing-firms-role-as-clearing-broker-for-client.html