Loathe to miss out on the chance to dispense some SEC-style justice, the U.K.’s Financial Services Authority today dished out a $27 million fine to Wall Street titan Goldman Sachs. Goldman’s crime? Failure to report this year’s SEC highly publicized if somewhat ineffectual investigation into its 2007 dealings in collateralized debt obligations.
Readers may remember the SEC investigation for its colorful antagonist Fabrice “I’m French” Tourre, the esoteric Abacus 2007-AC1 synthetic CDO and the $550 million settlement that concluded the inquiry.
Come on, you guys, you have to tell us about these kinds of things, said Margaret Cole, the FSA’s managing director of enforcement and financial crime: “We have repeatedly stressed the importance of firms self-reporting regulatory issues to the FSA in a timely way. GSI did not set out to hide anything, but its defective systems and controls meant that the level and quality of its communications with the FSA fell far below what we expect of an authorised firm. The fact that senior business people at GSI in London knew about Mr Tourre’s Wells Notice, but did not consider the obvious regulatory implications for GSI is very disappointing.”
The fine could have been steeper, the FSA said, but Goldman got a 30% discount for its cooperation with the regulator. In any case, $27 million amounts to almost nothing for Goldman, whose profits total $3.75 billion for the first half of this year.
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