FSA to Impose £20m Fine on Goldman Sachs
Goldman Sachs is facing a fine of £20m from the Financial Service Authority (FSA) as the investor bank has failed to notify to the regulator that they were being investigated for fraud in the United States.
The Goldman Sachs Group, Inc is a well known investment banking and securities firm operating globally and is engaged in securities, investment banking and investment management and several other financial services dealing primarily at institutional level. It is also a primary dealer in the treasury security market of the US.
The Financial Services Authority (FSA) is an independent NGO vested with statutory powers under the Financial Services and Markets Act 2000. FSA is accountable to the Ministers of Treasury and the Parliament.FSA is a company financed by the financial services industry
According to BBC news, FSA carried out investigation for 5 months into Abacus, a mortgage based investment product sold by Goldman Sachs and based on the outcome a penalty was slammed.
Goldman Sachs is regulated both in The U.S. and U.K. He has already paid £355.5m ($550m) to resolve charges framed by the US Securities and Exchange Commission (SEC). The charge framed was that Abacus investors were misinformed about the product by the marketing division of the bank. In the charges brought by the SEC it was told that the investors were not notified about the involvement of the hedge fund Paulson. Paulson was to have gained on failure of Abacus because there were defaults on the mortgages.
The Goldman Sachs investment Banking firm has admitted to the charges and has conceded that they should have informed FSA about one of the banking traders namely Fabrice Tourre who was under investigation concerning Abacus by the SEC when he was registered for carrying out work in UK in 2008 by them.