Goldman Sachs fined $15 million for swap disclosure violations

Goldman Sachs & Co (GS.N) has agreed to pay $15 million to settle charges brought by the U.S. Commodity Futures Trading Commission (CFTC) that Goldman Sachs failed to make proper disclosures to its swap customers and failed to communicate with them fairly, the regulator said on Monday.

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In a settled order, the CFTC found that Goldman Sachs opportunistically sold customers so-called "same-day" swaps at times that benefited the bank financially while hurting the customers financially, as a result of its opportunistic sales in 2015 and 2016. Following the settlement, the bank admitted that it failed to disclose key information regarding nearly all "same-day" swaps executed in 2015 and 2016, according to the regulator, as part of the settlement.

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The CFTC said Goldman managed to "seize an opportunity" to buy or sell swaps at a premium or discount to the projected settlement prices of certain equity indexes at the time they were trading, the CFTC said. Customers were unaware of key marks used to assess the swaps' value and the firm failed to communicate this information to them in a fair and balanced way, according to the regulator.

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Goldman Sachs violated the CFTC's business conduct standards by not providing clients with any information regarding the relative value of the swaps it offered, according to the regulator. This violated the CFTC's business conduct regulations for swap dealers.

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As part of its enforcement efforts, the CFTC "will aggressively pursue swap dealers that violate these business conduct standards" that promote fairness in the swaps market, enforcement director Ian McGinley stated in a statement.

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Goldman's spokesperson declined to comment on the matter.

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