Goldman Sachs slapped with £17.5m fine

 
City A.M. Reporter
Britain's financial watchdog slapped a £17.5m fine on Goldman Sachs inadequate disclosure of a US probe into the Wall Street powerhouse.

The fine – one of the biggest ever imposed in Britain – was related to Goldman's troubled Abacus mortgage-security product, which resulted in the investment bank being investigated by the U.S. Securities & Exchange Commission (SEC).

In July, Goldman agreed to pay $550m (£357m) to settle civil fraud charges over how it marketed the Abacus subprime mortgage product, ending months of negotiations that rattled the bank's clients and investors.

The Abacus product was marketed by French banker Fabrice Tourre. Tourre, who had dubbed himself as "Fabulous Fab," denied allegations that he or the bank had misled investors over the high-risk Abacus product.

Britain's Financial Services Authority said on Thursday that Goldman had not adequately informed it of the American investigation into the Abacus affair.

"Goldman Sachs International did not set out to hide anything, but its defective systems and controls meant that the level and quality of its communications with the FSA fell far below what we expect of an authorised firm," FSA director Margaret Cole said in a statement.

In a seven-word response to the FSA fine, a Goldman Sachs spokeswoman said: "We're pleased the matter is resolved."