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UK regulator fines Goldman US$27m
By Robert Barr |
September 10, 2010, Friday
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Print Edition
Print Edition
BRITAIN'S financial regulator hit Goldman Sachs International with a 17.5 million pounds (US$27 million) fine yesterday for failing to notify UK authorities about an investigation in the United States.
It was the second-largest fine imposed by the Financial Services Authority, eclipsed only by the 33.32 million pounds fine in June against JPMorgan Securities Ltd for mishandling clients' funds.
The British agency's investigation began in April after the US Securities and Exchange Commission filed civil fraud charges against Goldman Sachs for allegedly misleading buyers of complex mortgage-related investments in 2007. Goldman settled the charges in mid-July by agreeing to pay US$550 million.
"This penalty should send a message particularly to the senior management of large institutions of the need to have their firm's UK reporting obligations at the forefront of their minds," said Margaret Cole, the FSA's managing director of enforcement and financial crime.
The mortgage securities at issue in the SEC case cost two European banks that bought them nearly US$1 billion while allegedly helping Goldman client Paulson & Co capitalize on the housing bust by betting on them to fail.
Goldman failed to tell the FSA the SEC had issued a Wells Notice, notifying the company and London-based executive Fabrice Tourre that they were under investigation for allegedly orchestrating the mortgage-linked securities deal, the British agency said.
It was the second-largest fine imposed by the Financial Services Authority, eclipsed only by the 33.32 million pounds fine in June against JPMorgan Securities Ltd for mishandling clients' funds.
The British agency's investigation began in April after the US Securities and Exchange Commission filed civil fraud charges against Goldman Sachs for allegedly misleading buyers of complex mortgage-related investments in 2007. Goldman settled the charges in mid-July by agreeing to pay US$550 million.
"This penalty should send a message particularly to the senior management of large institutions of the need to have their firm's UK reporting obligations at the forefront of their minds," said Margaret Cole, the FSA's managing director of enforcement and financial crime.
The mortgage securities at issue in the SEC case cost two European banks that bought them nearly US$1 billion while allegedly helping Goldman client Paulson & Co capitalize on the housing bust by betting on them to fail.
Goldman failed to tell the FSA the SEC had issued a Wells Notice, notifying the company and London-based executive Fabrice Tourre that they were under investigation for allegedly orchestrating the mortgage-linked securities deal, the British agency said.
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