NASDAQ PHLX LLCLETTER OF ACCEPTANCE, WAIVER AND CONSENT
NO. 2019061061105
TO:Nasdaq Phlx LLC
c/o Department of Enforcement

RE:Goldman Sachs & Co. LLC, Respondent
Member Firm
CRD No. 361

Pursuant to Rule 9216 of Nasdaq Phlx
LLC ( Goldman orfirmPhlx
ure,1 Goldman Sachs & Co.
this Letter of Acceptance, Waiver and Consent

below. This AWC is submitted on the condition that, if accepted, Phlx will not bring any future
actions against the Respondent alleging violations based on the same factual findings describedherein.
I.
ACCEPTANCE AND CONSENTA.

Respondent hereby accepts and consents, without admitting or denying the findings, andsolely for the purposes of this proceeding and any other proceeding brought by or on
behalf of Phlx, or to which Phlx is a party, prior to a hearing and without an adjudicationof any issue of law or fact, to the entry of the following findings by Phlx:
BACKGROUND
Goldman has been a member of Phlx since January 1936 and a FINRA member sinceOctober 1936. It is a full-service broker-dealer engaged in, among other things, marketmaking, execution services, and underwriting. The firm is headquartered in New York,New York, and has approximately 8,700 registered individuals. The firm has no relevant
disciplinary history.
SUMMARY
This matter arises from a 2019 examination of the firm conducted byDepartment of Market Regulation on behalf of Phlx and other options exchanges. The
examination
Goldman failed to comply with the recordkeeping requirements of Rule 17a-3 of the1

Series 9000 of The Nasdaq Stock Market LLC Rules are incorporated by reference into Phlx Rule General 5,Section 3, and are thus Phlx Rules and thereby applicable to Phlx members, member organizations, persons
associated with member organizations, and others jurisdiction.

Securities Exchange Act of 1934 and Phlx Rule 760.2 During the same period, Goldman
failed to establish, maintain, and enforce a supervisory system reasonably designed toachieve compliance with Exchange Act Rule 17a-3 and Phlx Rule 760 in violation ofPhlx Rule 748.3
FACTS AND VIOLATIVE CONDUCT
1. The recordkeeping provisions of the federal securities laws and Phlx rules aredesigned to ensure that regulators have access to important information aboutsecurities transactions. Access to complete and accurate transaction records isessential for effective surveillance and examination of broker-dealers by Phlx andother regulators.
2. Exchange Act § 17(a) and Exchange Act Rule 17a-3(a)(6)(i) thereunder require
broker-dealers, such as Goldman, to create a memorandum of each brokerage order,
and of any other instruction, given or received for the purchase or sale of securities,
whether executed or unexecuted. The rule requires the memorandum to show, among
other things, the time of order entry.4
3. Phlx Rule 760, and subsequently Options 6E, Section 1, requires member
organizations to make, keep current and preserve such books and records as theExchange may prescribe and as may be prescribed by the Exchange Act and the rules
and regulations thereunder.
4. During the Relevant Period, Goldman failed to maintain accurate records forthousands of options orders manually handled by the relevant trading desks.
Specifically, Goldman routed to Phlx and another options exchange approximately
18,9085 options orders without systematically recording the transmission times.
5. Accordingly, the firm violated Exchange Act § 17(a) and Exchange Act Rule 17a-3
thereunder, Phlx Rule 760, and subsequently Options 6E, Section 1, during theRelevant Period.
6. Phlx Rule 748, and subsequently General 9, Section 20, requires members toapplying such procedures, to supervise the types of business(es) in which the member
or member organization engages in and to supervise the activities of all registeredrepresentatives, employees, and associated persons. The written supervisory
procedures and the system for applying such procedures shall reasonably be designed
to prevent and detect, insofar as practicable, violations of the applicable securities
laws and regulations, including the By2

As of February 3, 2020, Phlx Rule 760 was renumbered to Options 6E, Section 1.
As of February 3, 2020, Phlx Rule 748 was renumbered to General 9, Section 20.
4
Rule 17aor instruction for
5This number represents an extrapolation by FINRA based on sample periods reviewed.
3

7. During the Relevant Period, firm personnel responsible for reviewing manual options
order tickets entered by the relevant trading desks failed to verify that those ticketsincluded the time at which the orders were transmitted to options exchanges. Thefirm had no automated system or exception reports designed to verify that traders
were recording options order transmission times as required or that supervisors wereappropriately reviewing the order tickets to detect instances when the transmission
time was omitted. The firm remediated these deficiencies as of December 2020.
8. For the reasons set forth above, Goldman violated Phlx Rule 748, and subsequently
General 9, Section 20, during the Relevant Period.
B.

Respondent also consents to the imposition of the following sanctions:
1. Censure; and2. A total fine in the amount of $221,500 ($80,750 payable to Phlx).6
Respondent agrees to pay the monetary sanction in accordance with its executed payment
form. Respondent agrees to pay the monetary sanction upon notice that this AWC has
been accepted and that such payment is due and payable.
Respondent specifically and voluntarily waives any right to claim that it is unable to pay,
now or at any time hereafter, the monetary sanction imposed in this matter.
The sanctions imposed herein shall be effective on a date set by FINRA staff.
II.
WAIVER OF PROCEDURAL RIGHTS

Respondent specifically and voluntarily waives the following rights granted under Phlx Codeof Procedure:

6A.

To have a Formal Complaint issued specifying the allegations against the firm;B.

To be notified of the Formal Complaint and have the opportunity to answer theallegations in writing;

The remainder of the fine shall be allocated to BOX Exchange LLC, Cboe Exchange, Inc., Cboe C2 Exchange,
Inc., Cboe BZX Exchange, Inc., Cboe EDGX Exchange, Inc., Miami International Securities Exchange, LLC,MIAX Emerald, LLC, MIAX PEARL, LLC, Nasdaq ISE, LLC, Nasdaq GEMX, LLC, Nasdaq MRX, LLC, The
Nasdaq Options Market LLC, and NYSE Arca, Inc. for similar violations.

C.

To defend against the allegations in a disciplinary hearing before a hearing panel,to have a written record of the hearing made and to have a written decision issued;
andD.

To appeal any such decision to the Exchange Review Council and then to the U.S.
Securities and Exchange Commission and a U.S. Court of Appeals.

Further, Respondent specifically and voluntarily waives any right to claim bias or prejudgmentof the Chief Regulatory Officer, the Exchange Review Council, or any member of the Exchange
regarding the terms and conditions of this AWC, or other consideration of this AWC, including
acceptance or rejection of this AWC.
Respondent further specifically and voluntarily waives any right to claim that a person violated
the ex parte prohibitions of Rule 9143 or the separation of functions prohibitions of Rule 9144,
conditions of this AWC, or other consideration of this AWC, including its acceptance orrejection.
III.
OTHER MATTERS
Respondent understands that:A.

Submission of this AWC is voluntary and will not resolve this matter unless andEnforcement
and the Exchange Review Council, the Review Subcommittee, or the Office ofPhlx Rule 9216;

B.

If this AWC is not accepted, its submission will not be used as evidence to prove
any of the allegations against the Respondent; andC.

If accepted:
1.

This AWC will become part of the Respondent
record and may be considered in any future actions brought by Phlx or any
other regulator against the Respondent;

2.

Phlx may release this AWC or make a public announcement concerning
this agreement and the subject matter thereof in accordance with Phlx
Rule 8310 and IM-8310-3; and3.

Respondent may not take any action or make or permit to be made any
public statement, including in regulatory filings or otherwise, denying,directly or indirectly, any finding in this AWC or create the impressionthat the AWC is without factual basis. Respondent may not take any
position in any proceeding brought by or on behalf of Phlx, or to whichPhlx is a party, that is inconsistent with any part of this AWC. Nothing inthis provision affects the Respondent
positions in litigation or other legal proceedings in which Phlx is not aparty.
D.

Respondent may attach a Corrective Action Statement to this AWC that is astatement of demonstrable corrective steps taken to prevent future misconduct.
Respondent understands that it may not deny the charges or make any statementthat is inconsistent with the AWC in this Statement. This Statement does notconstitute factual or legal findings by Phlx, nor does it reflect the views of Phlx orits staff.

The undersigned, on behalf of the firm, certifies that a person duly authorized to act on its behalf
has read and understands all of the provisions of this AWC and has been given a full opportunity
to ask questions about it; that the firm
no offer, threat, inducement, or promise of any kind, other than the terms set forth herein and theprospect of avoiding the issuance of a Complaint, has been made to induce the firm to submit it.
Goldman Sachs & Co. LLC
Respondent_______________
Date

By: ______________________________
Print Name: _______________________
Title: _____________________________

Accepted by Phlx:_________________
Date____________________________________Monika V. MohanCounselDepartment of Enforcement
Signed on behalf of Phlx, by delegatedauthority from the Director of ODA