Goldman Sachs fined £17.5m by FSA
Updated on 09 September 2010
Wall Street giant Goldman Sachs is given a hefty fine from the UK's City regulator following an investigation which began in the wake of fraud charges against the bank in the US.
The fine, which was announced this morning, is £17.5m - one of the heaviest penalties ever levied by the FSA.
The FSA began its investigation in April after the US Securities and Exchange Commission (SEC) charged the American banking giant with misleading buyers of complex mortgage-backed investments in 2007, when the US housing market bubble was bursting.
The bank settled the fraud charge in mid-July by agreeing to pay £356m - the largest fine in the SEC's history.
The FSA said that Goldman failed to disclose that Fabrice Tourre, the trader accused by the SEC of being at the centre of the mortgage-backed securities deal, was under investigation.
Tourre moved to the company's London office to become executive director of Goldman Sachs International in late 2008, bringing his business dealings under the jurisdiction of the UK regulator.
He denied any wrongdoing and asked a federal court to throw out the SEC case.
According to the Wall Street Journal, Goldman will admit that it made a mistake in failing to tell the FSA about Tourre.
The bank made a profit of $3.5bn in the first three months of this year but saw profits slump to $613m between April and June.
This was due to a drop in trading revenues, the $550m fine and a $600m hit from the bonus tax in the UK.
