Goldman Sachs Fined $1.45 Million for Billions of Misreported Trades
By Staff
The Financial Industry Regulatory Authority announced that it has censured and fined Goldman Sachs & Co. LLC $1.45 million for widespread trade reporting failures and related supervisory lapses spanning multiple years.
According to FINRA, between June 2020 and June 2023, Goldman failed to accurately report data for approximately 36.6 billion equity order events to the consolidated audit trail, known as CAT, central repository. These errors were attributed to coding mistakes in the firm’s reporting logic, including mislabeling key data fields such as counterparty instructions and customer display flags.
Some of the most significant issues arose between October and November 2021. In October 2021, Goldman reconfigured one of its order gateways, inadvertently causing certain principal trades to be misclassified as agency trades. This led to over 6.8 million trades being misreported, more than 98,000 trades being overreported, and more than 372,000 inaccurate customer trade confirmations. The firm also generated more than 90 million inaccurate order memoranda during this period.
FINRA further found that Goldman’s supervisory system failed to detect or prevent the errors. The firm lacked a process for conducting comparative reviews of accepted CAT data against internal order and trade records until March 2022, almost two years after large firms were required to begin CAT reporting.
These actions resulted in violations of multiple FINRA rules, as well as SEC rules governing trade confirmations and recordkeeping. FINRA reported that Goldman has since implemented system changes to address the reporting issues, enhanced internal reviews of capacity codes, and updated its supervisory procedures.
The firm neither admitted nor denied the findings but consented to the sanctions, including the $1.45 million fine, of which $1.355 million will be paid to FINRA.
Goldman Sachs is a full-service broker-dealer engaged in market making, execution services, and underwriting, with headquarters in New York City. It has approximately 8,000 registered individuals among its 34 branches.
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