GS Goldman Sachs Group Inc

By Ira Iosebashvili 

Goldman Sachs Group Inc. will pay roughly $110 million to settle claims that it failed to supervise foreign exchange traders who put clients at a disadvantage by inappropriately sharing information about their market positions with rivals.

The firm will make payments of $54.75 million to both the Federal Reserve Board and the New York Department of Financial Services, the regulators said Tuesday.

Between 2008 and early 2013, the bank's traders used electronic chat rooms to share confidential customer information and to discuss potentially coordinating trading activity, the New York agency said.

"This improper activity sought to enable banks and the involved traders to achieve higher profits from execution of foreign exchange trades, sometimes at customers' expense," it said.

The traders adjusted prices for particular securities and assisted other banks' traders by providing confidential information about Goldman Sachs's clients or their orders, sometimes giving customers code names such as "fiddler" and "dodgy aussie seller," the DFS said.

While the bank had policies addressing its foreign exchange business in place as early as 2001, "escalation of compliance concerns did not always occur as required, allowing potentially improper trading activity to continue."

The individuals that had participated in the improper trading are no longer with the firm, according to a person with knowledge of the matter.

"We are pleased to have resolved the Federal Reserve Board's and New York Department of Financial Services' respective reviews and appreciate their recognition that we have already taken significant steps to enhance our policies and procedures," Goldman Sachs said.

The fines come after a string of actions against banks over the past several years. Five banks -- Barclays PLC, Citigroup Inc., JPMorgan Chase & Co., Royal Bank of Scotland Group PLC and UBS AG -- pleaded guilty in May 2015 and paid $5.6 billion in penalties to resolve investigations into whether the banks worked together to manipulate foreign currency prices.

In a separate case that grew out of the investigations, prosecutors in July charged two HSBC Holdings PLC employees with fraudulently front-running a $3.5 billion currency trade for a client. The HSBC traders have pleaded not guilty.

--Telis Demos contributed to this article.

Write to Ira Iosebashvili at ira.iosebashvili@wsj.com

(END) Dow Jones Newswires

May 01, 2018 17:00 ET (21:00 GMT)

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