The Commodity Futures Trading Commission (CFTC) has issued an order simultaneously filing and settling charges against Goldman Sachs for violating the cease-and-desist provision of a previous order.
The move follows one from November 2019, where the CFTC found that Goldman Sachs had failed to record the phone lines of a trading and sales desk for 20 calendar days between January and February 2014, following a software patch which caused its recording hardware to malfunction.
Following this, the CFTC ordered Goldman Sachs to pay a $1 million civil monetary penalty and to avoid further violations of CFTC recordkeeping provisions.
The CFTC found that since the issuance of the November 2019 order, the bank had additional recordkeeping failures, which violated the cease-and-desist provision of the earlier order.
Separately, from March 2020, Goldman Sachs experienced software issues connected to a new software which resulted in failures to properly record audio, which impacted thousands of calls. A permanent fix resulting from a software update was completed in June 2022.
As charged, the bank is required to pay a $5.5 million civil monetary penalty and to cease and desist from further violations of the recordkeeping provisions of the Commodity Exchange Act and CFTC regulations.
Ian McGinley, director of enforcement at the CFTC, said: “As this case demonstrates, the CFTC will continuously pursue swap dealers that fail to meet their recording obligations and there will be consequences for violating CFTC orders, including increased penalties.
“We are committed to holding swap dealers accountable when they fail to comply with their regulatory obligations and fail to abide by obligations imposed by prior CFTC orders.”
The CFTC’s order recognises Goldman Sachs’ cooperation with the CFTC’s investigation, while also acknowledging the bank’s “representations concerning its remediation in connection with this matter”.
Goldman Sachs did not respond to a request for comment.