WASHINGTON - Goldman Sachs (GS) has been ordered to pay $120 million to settle federal regulators’ charges that it deliberately manipulated a global benchmark for interest-rate swaps to its advantage.
The U.S. Commodity Futures Trading Commission said Wednesday that several Goldman traders, including the head of the bank’s Interest Rate Products Trading Group in the U.S., used trades and false reports to manipulate the benchmark between 2007 and 2012.
Specifically, the bank sought to manipulate what is known the U.S. Dollar International Swaps and Derivatives Association Fix. The scheme to affect the global benchmark for interest rate products was an effort to benefit Goldman’s derivatives holdings, the CFTC said.
In internal communications, Goldman traders had “gamed the fix” in order to benefit related positions, according to the commission.
The penalty “demonstrates the breadth of this kind of misconduct across the industry, and within Goldman, the extent of the misconduct across trading desks and product lines,” said Aitan Goelman, the CFTC’s Director of Enforcement, in a statement.
In addition to the fine, Goldman must also implement internal controls and report to the CFTC on whether those controls have been effective.
Goldman says it is pleased to have the matter resolved.