Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.
FINRA Fines Goldman over Wells Notice Flap
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
release.
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).