A FINRA news release said one of the targeted employees was Fabrice
Tourre, whose Wells notice was issued in connection with the SEC’s
investigation of an offering of a synthetic collateralized debt
obligation (CDO) called ABACUS 2007-ACI (Abacus). (See CDO Complaints Stack Up for Goldman Sachs)
FINRA said firms are required to update a representative’s regulatory record by filing a Form U4 reporting the receipt of a Wells Notice within 30 days of learning of the Notice. In Tourre’s case, his Form U4 was not amended until May 3, 2010, more than seven months after Goldman learned of his Wells Notice, and only after the SEC filed a complaint against Goldman and Tourre on April 16, 2010, FINRA said.
FINRA found that Goldman did not have adequate supervisory procedures and systems to ensure that required disclosures were made when registered employees received notice that they were the subject of a regulatory investigation.
“Goldman’s failures impacted the ability of FINRA and other
securities regulators to discharge their registration, examination and
oversight duties, and limited the ability of investors and other market
participants to adequately assess the individuals through FINRA’s public
disclosure program, BrokerCheck,” said James S. Shorris, FINRA
Executive Vice President and Acting Chief of Enforcement, in the news
As part of the settlement, Goldman also agreed to review its supervisory procedures and systems in the reporting area and to implement and document any necessary remedial measures. Goldman neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
In September, the U.K’s Financial Services Authority (FSA) fined London-based Goldman Sachs International (GSI) £17.5 million for breaching FSA principles regarding the same issues (see FSA Fines Goldman Sachs £17.5M).