Goldman Sachs to Pay SEC $6 Million in Penalties for Providing Deficient Blue Sheet Data
Goldman Sachs & Co. LLC has reached a settlement with the Securities and Exchange Commission (SEC) over charges of inadequate provision of securities trading information, commonly referred to as blue sheet data. The settlement involves a $6 million penalty to resolve the SEC's charges.
The SEC's investigation revealed that over a span of roughly ten years, Goldman Sachs submitted more than 22,000 blue sheet data reports to the SEC, and these submissions were found to be deficient. The deficiencies stemmed from 43 different types of errors, resulting in missing or inaccurate trade data for a staggering 163 million transactions. The SEC's order also highlighted Goldman's lack of sufficient processes to verify the accuracy of its electronic blue sheet submissions.
The significance of accurate blue sheet data cannot be overstated. This information is vital to the SEC's ability to carry out its regulatory and enforcement functions effectively. It plays a pivotal role in safeguarding the interests of investors and maintaining the integrity of financial markets.
Thomas P. Smith Jr., Associate Regional Director in the New York Regional Office, emphasized the importance of complete and precise blue sheet data, stating, "Firms must provide complete and accurate blue sheet data in response to our requests."
The SEC's order concluded that Goldman Sachs willfully violated federal securities laws governing broker-dealer recordkeeping and reporting. As part of the settlement, Goldman admitted to the findings outlined in the SEC's order. The company has agreed to be censured and to pay the $6 million penalty.
Additionally, the SEC order noted that Goldman took affirmative steps to address the issues in its blue sheet reporting systems and controls. This included a comprehensive review of its reporting program, resulting in the self-reporting of 29 of the 43 error types identified in the order. Goldman also implemented significant enhancements to its supervisory controls.
In a separate but related action, the Financial Industry Regulatory Authority (FINRA) reached its settlement with Goldman Sachs over the same conduct.
The settlement between Goldman Sachs and the SEC underscores the necessity of financial institutions to adhere to regulatory requirements and maintain the integrity of data submissions. The penalty reflects the SEC's commitment to enforcing compliance with blue sheet reporting standards and ensuring the accuracy and completeness of critical trading data.