FINRA recently announced that it has fined Goldman, Sachs & Co. $650,000 for failing to disclose that two of its registered representatives, including Fabrice Tourre, had received formal notices from the Securities and Exchange Commission (SEC) that they were the subjects of investigations. Tourre’s “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).
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 Sachs learned of his Wells Notice, and only after the SEC filed a complaint against Goldman Sachs and Tourre on April 16, 2010.
FINRA found that Goldman Sachs did not have adequate supervisory procedures and systems in place to ensure that required disclosures were made when registered employees received notice that they were the subject of a regulatory investigation. FINRA also found that Goldman Sachs’ written supervisory procedures, manuals and policies were inadequate. Nowhere did the procedures and policies mention “Wells Notices” specifically and the need to make disclosure when one was issued.
As part of the settlement, Goldman Sachs also agreed to review its supervisory procedures and systems in the reporting area and to implement and document any necessary remedial measures.
In concluding this settlement, Goldman Sachs neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
If you have questions regarding investments you made with Goldman Sachs, The White Law Group may be able to help. For a free consultation, call the firm at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
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