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Goldman (GS) Is Fined $6M for Deficient Blue Sheet Submissions
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The Goldman Sachs Group, Inc. (GS - Free Report) has agreed to pay a penalty of $6 million to Securities and Exchange Commission’s (SEC) for not providing complete and accurate information in the blue sheets.
Markedly, blue sheets contain information regarding securities trading and transactions that are provided to various regulatory authorities.
Per SEC’s findings, Goldman made more than 22,000 inadequate blue sheet submissions to it from 2012 to 2022, comprising 43 different types of errors that affected more than 163 million transactions.
Further, SEC stated that GS did not have adequate processes that could verify the accuracy of its electronic blue sheet submissions. Moreover, per SEC, Goldman is believed to have knowingly violated the recordkeeping and reporting provisions of the federal securities laws.
Hence, this wall street biggie agreed to pay the fine levied on it, and has also undertaken remedial actions to rectify and improve the reporting systems and controls of the blue sheet submissions. This includes the conduct of a full-scale review of its reporting program, which led to self-reporting of 29 of the 43 types of errors highlighted by SEC.
Apart from this legal hassle faced by GS, last week, U.S. District Judge, Jesse Furman, in Manhattan trimmed a federal lawsuit, allowing American cities to pursue class-action claims that allege eight large banks including GS of driving up interest rates paid on a popular municipal bond, per Reuters article.
Beside these legal hassles faced by Goldman, it has been navigating tough macro-economic backdrop by undertaking various job cuts and divestitures. Markedly, Goldman’s consumer-lending business, GreenSky, is being considered to be acquired by a consortium led by Sixth Street Specialty Lending, Inc (TSLX - Free Report) . The divestment is part of its major business restructuring initiative to focus on its core strengths of investment banking and trading, while reducing its retail footprint.
Also, earlier this month, Financial Times reported that GS was planning another wave of job cuts that could take place as soon as next month. This was a part of its yearly practice of letting go of those employees who are deemed to be the lowest performers.
Goldman Sachs’s shares have gained 3.2% over the past six months compared with the industry’s 2.5% growth.
Last week, a lawsuit has been filed in the New York state court against Morgan Stanley (MS - Free Report) by private equity firms Certares Management LLC and Knighthead Capital Management LLC. The firms claim that MS used deceptive practices in relation to a credit agreement investment for a luxury high-speed rail line.
The firms are seeking at least $750 million in damages from Morgan Stanley. Certares and Knighthead claim that MS illicitly restructured a deal by which they invested in a loan to Miami-based Brightline Holdings.
Interactive Brokers Group, Inc.’s (IBKR - Free Report) local unit in Australia has been penalized for its failure to identify and respond effectively to suspicious trading activities by one of its clients. Australian Securities & Investments Commission (“ASIC”) has fined IBKR AU$832,500 ($538,000) for negligence.
Market Disciplinary Panel of ASIC found that IBKR allowed an experienced trader to place orders with an intention of raising the closing price of an ASX-listed stock, Orthocell.
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Goldman (GS) Is Fined $6M for Deficient Blue Sheet Submissions
The Goldman Sachs Group, Inc. (GS - Free Report) has agreed to pay a penalty of $6 million to Securities and Exchange Commission’s (SEC) for not providing complete and accurate information in the blue sheets.
Markedly, blue sheets contain information regarding securities trading and transactions that are provided to various regulatory authorities.
Per SEC’s findings, Goldman made more than 22,000 inadequate blue sheet submissions to it from 2012 to 2022, comprising 43 different types of errors that affected more than 163 million transactions.
Further, SEC stated that GS did not have adequate processes that could verify the accuracy of its electronic blue sheet submissions. Moreover, per SEC, Goldman is believed to have knowingly violated the recordkeeping and reporting provisions of the federal securities laws.
Hence, this wall street biggie agreed to pay the fine levied on it, and has also undertaken remedial actions to rectify and improve the reporting systems and controls of the blue sheet submissions. This includes the conduct of a full-scale review of its reporting program, which led to self-reporting of 29 of the 43 types of errors highlighted by SEC.
Apart from this legal hassle faced by GS, last week, U.S. District Judge, Jesse Furman, in Manhattan trimmed a federal lawsuit, allowing American cities to pursue class-action claims that allege eight large banks including GS of driving up interest rates paid on a popular municipal bond, per Reuters article.
Beside these legal hassles faced by Goldman, it has been navigating tough macro-economic backdrop by undertaking various job cuts and divestitures. Markedly, Goldman’s consumer-lending business, GreenSky, is being considered to be acquired by a consortium led by Sixth Street Specialty Lending, Inc (TSLX - Free Report) . The divestment is part of its major business restructuring initiative to focus on its core strengths of investment banking and trading, while reducing its retail footprint.
Also, earlier this month, Financial Times reported that GS was planning another wave of job cuts that could take place as soon as next month. This was a part of its yearly practice of letting go of those employees who are deemed to be the lowest performers.
Goldman Sachs’s shares have gained 3.2% over the past six months compared with the industry’s 2.5% growth.
Image Source: Zacks Investment Research
GS presently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Financial Misconduct by Other Firms
Last week, a lawsuit has been filed in the New York state court against Morgan Stanley (MS - Free Report) by private equity firms Certares Management LLC and Knighthead Capital Management LLC. The firms claim that MS used deceptive practices in relation to a credit agreement investment for a luxury high-speed rail line.
The firms are seeking at least $750 million in damages from Morgan Stanley. Certares and Knighthead claim that MS illicitly restructured a deal by which they invested in a loan to Miami-based Brightline Holdings.
Interactive Brokers Group, Inc.’s (IBKR - Free Report) local unit in Australia has been penalized for its failure to identify and respond effectively to suspicious trading activities by one of its clients. Australian Securities & Investments Commission (“ASIC”) has fined IBKR AU$832,500 ($538,000) for negligence.
Market Disciplinary Panel of ASIC found that IBKR allowed an experienced trader to place orders with an intention of raising the closing price of an ASX-listed stock, Orthocell.