Tuesday, May 10, 2011

Goldman: CFTC Probing Firm's Role As Clearing Broker For Client

Goldman Sachs Group said in its quarterly regulatory filing that the Commodity Futures Trading Commission is investigating its Goldman Sachs Execution and Clearing division's role as clearing broker for an unnamed SEC-registered broker dealed, reports Dow Jones.

The agency has orally advised Goldman it intends to bring aiding and abetting, civil fraud and supervision-related charges against the Goldman operation related to its clearing services for this broker-dealer.

The CFTC, the filing said, is basing these charges on allegations Goldman knew or should have known that the client's subaccounts at Goldman were accounts belonging to customers of the broker-dealer and not the broker-dealer's own accounts.

Further, details of the investigation were not available.

The filing says Goldman is cooperating with the investigation.

The CFTC appears to be much more aggressive in its investigations of late. Sources advise that the CFTC is examining activities as various commodity related newsletters.

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