Goldman Sachs will pay $5.5 million to settle charges it failed to properly keep records of staff mobile-phone calls, and for breaching an order from November 2019, the Commodity Futures Trading Commission said Tuesday.
The 2019 CFTC order found the bank failed to record trading and sales desk phone calls for 20 calendar days in 2014 due to a hardware malfunction. At the time, Goldman was ordered to pay $1 million, and to cease and desist from further recordkeeping violations.
However, following the 2019 order, Goldman violated the cease-and-desist provision with more recordkeeping failures, according to the CFTC. Just four months after the original order, a vendor’s recording service saw increased use because of the COVID-19 pandemic, leading to more failures in the vendor’s hardware and thousands of further failures to record and retain calls, the agency said.
The issue was discovered, and a temporary fix was implemented, in May 2020; and a new system was installed that September.
Separately, the bank in March 2020 began using trading software that later was found to have recording issues, and Goldman again failed to record thousands of phone calls, the CFTC said. A software update to fix the issue was completed in June 2022.
“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,” Ian McGinley, the agency’s director of enforcement, said in a statement. “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.”
Goldman is “pleased to have this matter resolved,” a spokesperson for the bank told Reuters.
Recordkeeping issues have been a hot topic of late. Regulators recently fined 11 firms, including Wells Fargo, BNP Paribas and Societe Generale, to settle allegations that they used unapproved electronic messaging channels like WhatsApp for business communications.
The fines were the latest in a so-far two-year effort by regulators to root out big banks’ use of “off-channel” communication apps.
