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Goldman Clearing Arm to Pay $1.8M FINRA Fine Over OATS Violations

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Goldman Sachs Execution & Clearing L.P. agreed Monday to pay $1.8 million to the Financial Industry Regulatory Authority for systemic Order Audit Trail System (OATS) reporting violations spanning a period of more than eight years, failure to accurately submit required trade reports to the appropriate FINRA Trade Reporting Facility (TRF), and related supervisory failures.

“OATS data is integral to FINRA’s automated market surveillance program to detect manipulative activity and other potential violations of FINRA rules and federal securities laws,” said Thomas Gira, executive VP of FINRA Market Regulation, in a statement. “It is critical that firms have the necessary systems and supervision in place to ensure compliance with their OATS and trade reporting obligations.”

FINRA rules require firms to transmit all applicable order information to OATS in a “complete and accurate manner.”

FINRA found that Goldman Sachs Execution & Clearing failed to transmit a substantial number of order-related events to OATS for its alternative trading system (ATS) for approximately seven years, and the firm transmitted inaccurate data for a large number of order-related events for more than eight years.

Also, FINRA states that even though Goldman Sachs Execution & Clearing’s ATS captured order event times in milliseconds, it failed to report order event timestamps in milliseconds for a 10-month period.

The firm also submitted “a large number of inaccurate, incomplete or improperly formatted trade reports that did not report execution timestamps in milliseconds for a three-month period. During the period of review, Goldman Sachs Execution & Clearing did not have adequate systems and controls in place to detect and prevent the violations.”

In concluding this settlement, the Goldman clearing unit neither admitted nor denied the charges but consented to the entry of FINRA’s findings.

— Check out Treasury Securities Dealers Accused of Collusion in Lawsuit on ThinkAdvisor.


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