Federal regulators on Wednesday announced a $120 million fine against Goldman Sachs for its attempt to rig a reference rate used to set pricing in global markets.
The Commodity Futures Trading Association said it settled with the bank over charges that bankers in its New York offices had tried to manipulate a reference rate known as the ISDAfix from 2007 to 2012. Goldman Sachs joins a number of other banks in being penalized for the same offense, namely coordinating via chats and other means to rig the benchmark rate.
Aitan Goelman, the CFTC’s director of enforcement, said the settlement “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.”
According to the CFTC, Goldman’s traders described manipulating rates in plain language. For example, one trader told a broker to “spend what you need, but make SURE we get the print,” meaning get the desired rate. Among themselves, the traders would refer to rates they’d set as the “jacked price.” Initially, the bank didn’t cooperate with their probe, the agency said.
In addition to paying a fine, Goldman Sachs has to take steps to improve their oversight of traders working in the area, the CFTC said.
