Goldman Sachs International

On 9 September 2010, the FSA imposed a financial penalty on Goldman Sachs International (GSI or the Firm) of £17.5 million for breaches of Principles 2, 3 and 11 of the FSA's Principles for Businesses (the Principles) which occurred between July 2009 at the latest and 16 April 2010 (the Relevant Period). The firm breached Principle 11 by failing to inform the FSA, until 16 April 2010, that the staff of the United States Securities and Exchange Commission (SEC) had on 29 September 2009 served a Wells Notice indicating the SEC staff's proposal to recommend an enforcement action for serious violations of US securities law by an approved person employed by GSI relating to his prior activities when working in the US for Goldman, Sachs & Co. The firm breached Principles 2 and 3 by (i) failing to ensure that it had proper and effective systems and controls in place for the communication to GSI of information about regulatory investigations relating to other members of the Goldman Sachs Group, Inc. that might affect GSI, as a result of which GSI failed to consider providing the FSA with information concerning the SEC's investigation into the Abacus 2007-AC1 synthetic collateralised debt obligation, which Goldman, Sachs & Co. structured and which was marketed to sophisticated institutional investors, including by GSI from the UK; and (ii) failing to conduct its business with due skill, care and diligence with respect to its regulatory reporting obligations. The Firm settled at an early stage and qualified for a 30% discount. Without the discount the fine would have been £25 million.