Goldman Discloses CFTC Probe and Faces Possible Civil Fraud Charges

“By LIZ MOYER

Goldman Sachs Group Inc.’s clearing and execution division faces civil fraud and other charges by the Commodity Futures Trading Commission, which is probing its role as a clearing broker for an unnamed registered broker-dealer.

In its quarterly filing with the Securities and Exchange Commission Tuesday, Goldman said that the agency’s staff has orally advised it that it intends to recommend the agency bring “aiding and abetting, civil fraud and supervision-related charges” against Goldman Sachs Execution & Clearing.

The CFTC, the filing said, is basing these charges on allegations Goldman knew, or should have known, that its broker-dealer client’s subaccounts at Goldman were accounts belonging to customers of the broker-dealer and not the broker-dealer’s own accounts.”

Full article