Wall Street giant Goldman Sachs fined £17.5m by FSA
BBC Business News 9 September 2010
Wall Street giant Goldman Sachs has been fined £17.5m ($27m) by the UK's City regulator, the Financial Services Authority.
The fine is for failing to tell the FSA it was under investigation for fraud by the US financial watchdog this summer.
In July, Goldman settled the fraud charge with the Securities and Exchange Commission by paying $550m (£356m).
BBC business editor Robert Peston said it was one of the heaviest fines ever imposed by the FSA.
Margaret Cole, FSA managing director of enforcement and financial crime, said: "GSI [Goldman Sachs International] 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."
Goldman agreed to pay the US fine to settle civil fraud charges of misleading investors.
The charges concerned the bank's marketing of complex mortgage investments, just as the US housing market faltered.
The FSA said Goldman also did not tell them that Fabrice Tourre, the trader who helped to create these mortgage derivatives, was under investigation.
This, it said, was particularly relevant as Mr Tourre moved from the US to London, and therefore came under the auspices of the UK regulator.
Goldman has admitted that it made a mistake, our correspondent added.
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