Disclosure Violations Cost Goldman Sachs $15M as Settlement in Swap Business

Goldman Sachs Group Inc GS agreed to pay $15 million to settle U.S. Commodity Futures Trading Commission (CFTC) charges that it failed to make proper disclosures and communicate fairly to swap customers.
In 2015 and 2016, Goldman opportunistically solicited or agreed to enter into same-day swaps only on days and at times that were financially advantageous to Goldman and disadvantageous to its clients.
Moreover, how Goldman communicated to clients caused the same-day swaps to appear more economically advantageous to the clients than they actually were.
According to the regulator, as part of the settlement, the bank admitted it failed to disclose essential information for nearly all "same-day" swaps executed in 2015 and 2016.
The order finds that Goldman failed to communicate fairly and rationally by touting the supposed benefits of same-day swap transactions but not the related costs.
The swap contracts were tied to an index of stocks.
Wall Street Journal reported that clients that traded with Goldman on those terms either bought the index at an above-market level or sold at a below-market level, which put them "underwater" at the start of the trade, the CFTC said in a settlement order.
Price Action: GS shares are down 0.79% at $322.40 during the premarket session on the last check Tuesday.
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