Goldman Axed Top Banking Executive Amid Communication Violation Scandal: Report

Goldman Sachs Group, Inc. GS has reportedly dismissed multiple employees from its budding corporate cash management division due to severe violations of its communications guidelines. 

Four workers were terminated, including the Bank's partner Hari Moorthy, the global head of transaction banking, the Financial Times reported, citing statements from a person familiar with the matter. 

Earlier, banking institutions have paid fines for unapproved messaging apps such as WhatsApp to conduct company business, Financial Times said. 

In a memo sent to Goldman employees, the company stated, "The firm terminated the employment of several leaders in the transaction banking business after losing confidence in them following serious violations of firm policies," as highlighted by Financial Times.

Last month, the company's partnerships with financial technology companies were reportedly under the scanner of the U.S. banking regulators owing to issues regarding compliance and risk. 

Concerns highlighted by the Fed included poor due diligence and monitoring processes when accepting high-risk non-bank clients.

Read More: Goldman Sachs' Fintech Unit Faces Scrutiny, Bank Halts Riskier Client Onboarding: Report

Following the termination of Moorthy and other leaders, the report added that the daily supervision of transaction banking will now be under the guidance of Philip Berlinski, Akila Raman, and Luc Teboul.

Last year, Goldman and a cluster of other banks consented to pay $200 million in penalties to the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission due to lapses in record-keeping, the report added.

Transaction banking is one of Goldman's new businesses, launched in 2020, it added. The dismissals indicate Wall Street tightening the reins on employee communications, mentioned Financial Times.

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Price Action: GS shares are trading higher by 0.45% to $336.50 premarket on the last check Thursday.