The Commodity Futures Trading Commission (CFTC) has outlined an order filing and settling charges against Goldman Sachs & Co. LLC (Goldman) alleging CFTC Business Conduct Standards violations applicable to swap dealers.
“The purpose of the CFTC’s Business Conduct Standards is to promote transparency and fairness in the swaps market,” CFTC Director of Enforcement Ian P. McGinley said. “The CFTC is committed to ensuring that swap dealers abide by these standards so that swap counterparties receive disclosures allowing them to assess material aspects of the swaps before entering into them.”
McGinley said the CFTC would aggressively pursue swap dealers violating the business conduct standards.
The CFTC found Goldman Sachs failed to disclose dozens of pre-trade-mid-market marks (PTMMM), in violation of Regulation 23.431 and failed to communicate to clients in a fair and balanced manner based on principles of fair dealing and good faith, in violation of Regulation 23.433.
According to the CGTC, Goldman also admitted that for nearly all same-day swaps executed in 2015 and 2016, it either failed to disclose any PTMMM or failed to disclose an accurate PTMMM, a CFTC regulation violation.
The CFTC indicated the order imposes a $15 million civil monetary penalty, with the Division of Enforcement staff responsible for this case being Sam Wasserman, Trevor Kokal, David Acevedo, Lenel Hickson, Jr., and Manal M. Sultan.