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UNITED STATES OF AMERICA 


Before the 


COMMODITY FUTURES TRADING COMMISSION 


In the Matter of: 

The Goldman Sachs Group, Inc., and 

Goldman, Sachs & Co., 

Respondents. 

CFTC Docket No. I 7 -03 

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~~~~~~~~~~~~~) 

Office of Proceedings 


Proceedings Clerk 


9:17 am, Dec 21, 2016 

ORDER INSTITUTING PROCEEDINGS PURSUANT TO 


SECTIONS 6(c) AND 6(d) OF THE COMMODITY EXCHANGE ACT, MAKING 


FINDINGS, AND IMPOSING REMEDIAL SANCTIONS 


I. 

The Commodity Futures Trading Commission ("Commission") has reason to believe that 

The Goldman Sachs Group, Inc. and Goldman, Sachs & Co. (collectively, "Respondents," 

"Goldman," or the "firm") have violated the Commodity Exchange Act (the "Act" or "CEA") 

and Commission Regulations ("Regulations"). Therefore, the Commission deems it appropriate 

and in the public interest that public administrative proceedings be, and hereby are, instituted to 

determine whether Respondents engaged in the violations set forth herein, and to determine 

whether any order shall be issued imposing remedial sanctions. 

II. 

Jn anticipation of the institution of an administrative proceeding, Respondents have 

submitted an Offer of Settlement ("Offer"), which the Commission has detennined to accept. 

Without admitting or denying the findings or conclusions herein, Respondents consent to the 

entry and acknowledge service of this Order Instituting Proceedings Pursuant to Sections 6(c) 

and 6(d) of the Commodity Exchange Act, Making Findings, and Imposing Remedial Sanctions 

("Order"). 1 

Respondents consent to the entry of this Order and to the use of these findings in this proceeding and in any other 

proceeding brought by the Commission or to \Vhich the Commission is a party; provided, ho\vever, that Respondents 

do not consent to the use of the Offer, or the findings or conclusions in this Order, as the sole basis for any other 

proceeding brought by the Commission, other than in a proceeding in bankruptcy or to enforce the terms of this 

Order. Nor do Respondents consent to the use ofthe Offer or this Order, or the findings or conclusions in this Order 

consented to in the Offer, by any other party in any other proceeding. 

1 
III. 

The Commission finds the following: 

A. Summary 

Beginning in January 2007 and continuing through March 2012 (the "Relevant Period"), 

Goldman, by and through certain of its traders in New York, attempted to manipulate the U.S. 

Dollar International Swaps and Derivatives Association Fix ("USO ISDAFIX" or the 

"benchmark"), a leading global benchmark referenced in a range of interest rate products, to 

benefit Goldman's derivatives positions in instruments such as swaps, cash-settled options on 

interest rate swaps, swap futures contracts, and at times certain exotic structured products. 

ISDAFIX rates and spreads are published daily and are meant to indicate the prevailing 

mid-market rate, at a specific time of day, for the fixed leg of a standard fixed-for-floating 

interest rate swap. 

2 They are issued in several currencies. USO ISDAFIX rates and spreads are 

published for various maturities of U.S. Dollar-denominated swaps, including I-year to IO-years, 

15-years, 20-years, and 30-years. The most widely used USO ISDAFIX rates and spreads, and 

the ones at issue in this Order, are those that are intended to indicate the prevailing market rate as 

of 11 :00 a.m. Eastern Time. The 11 :00 a.m. USO ISO AF IX rate is used for cash settlement of 

options on interest rate swaps, or swaptions, and as a valuation tool for certain other interest rate 

products. For example, USO ISDAFIX was used during the Relevant Period in settlement of 

interest rate swap futures contracts traded on the Chicago Mercantile Exchange ("CME") and as 

a component in the calculation of various proprietary interest rate indices and structured 

products. 

During the Relevant Period, USO ISDAFIX was set each day in a process that began at 

exactly 11 :00 a.m. Eastern Time with the capture and recording of swap rates and spreads from a 

U.S.-based unit of a leading interest rate swaps broking firm ("Swaps Broker"). Swaps Broker 

disseminated rates and spreads captured in this 11 :00 a.m. "snapshot," "fix," or "print" - as it 

was referred to by traders and brokers - as references to a panel of banks and other financial 

institutions (collectively, "banks'"). The banks then made submissions to Swaps Broker. Some 

Goldman traders referred to Goldman's submissions and the submission process as the "poll" or 

"polling." Each bank's submission was supposed to reflect the midpoint of where that dealer 

would itself offer and bid a swap to a dealer of good credit as of 11 :00 a.m. Eastern Time. Most 

banks on the panel, including Goldman, usually submitted Swaps Broker's reference rates and 

spreads as captured in the 11 :00 a.m. snapshot. As a result, after an averaging of the 

submissions, the reference rates and spreads became the published USO ISDAFIX almost every 

day. 

On certain days on which Goldman had a trading position settling or resetting against the 

USO ISDAFIX, Goldman attempted to manipulate USO ISDAFIX rates through its trading at the 

2 In 2014, the administration ofISDAFIX changed, and a new version of the benchmark is published under a 

different name by a new administrator using a different methodology. 

2 

11 :00 a.m. fixing and by making submissions to Swaps Broker that were skewed to benefit 

derivatives positions held by Goldman. Goldman's unlawful conduct involved multiple traders, 

including the head of Goldman's Interest Rate Products Trading Group in the United States. 

First. certain Goldman traders bid, offered, and executed transactions in targeted interest 

rate products, including swap spreads, at the critical 11 :00 a.m. fixing time with the intent to 

affect the reference rates and spreads captured by Swaps Broker in the "print" sent to submitting 

banks, and thereby to affect the published USO lSDAFIX. As captured in emails and audio 

recordings, on some occasions when Goldman had derivatives positions settling or pricing 

against USO ISDAFIX, its traders discussed among themselves and with Swaps Broker 

employees their intent to move USO lSDAFIX rates in whichever direction benefitted their 

positions. Certain Goldman traders described such attempts to manipulate USO ISDAFIX as 

having "gamed the fix."3 

Second, certain traders at Goldman attempted to manipulate USO ISDAFIX by making 

false submissions to Swaps Broker on behalf of Goldman, skewing the rates and spreads 

submitted in the direction that could have moved the USO ISDAFIX setting to benefit 

Goldman's trading positions. A bank's derivatives trading positions or profitability are not 

legitimate or permissible factors on which to base submissions in connection with a benchmark. 

Yet on many occasions in the Relevant Period, Goldman traders made USO ISDAFIX 

submissions higher or lower for the purpose of benefitting derivative positions priced or valued 

against the benchmark. These submissions were false, misleading, or knowingly inaccurate 

because they did not report where Goldman would itself bid or offer interest rate swaps to a 

dealer or good credit absent a desire to manipulate USO ISDAFIX, but rather reflected prices 

that were more favorable to the firm's specific positions. At times, Goldman combined such 

wrongful submissions with its illegitimate attempts to manipulate the benchmark through trading 

to increase the likelihood that the targeted USO !SDAFIX rates would move in a beneficial 

direction. 

* * * 

In accepting Goldman's Offer, the Commission notes that prior to the latter stages of the 

Division of Enforcement's ("Division") investigation, Goldman's cooperation was not 

satisfactory. Goldman did not make certain productions as expeditiously as the Division 

expected and initially failed to produce certain communications and documents that were 

potentially relevant to identifying misconduct. The Commission recognizes that Goldman took 

remedial action to improve internal controls and policies related to ISDAFIX and its successor 

benchmark. 

Unless otherwise indicated, all of the quotations in this Order are drawn from written communications, generally 

emails and instant messages, between and among traders and brokers during the Relevant Period. 

3 


3 
B. Respondents 

The Goldman Sachs Group, Inc. is a bank holding company and the publicly held 

parent company of the Goldman organization. 

Goldman, Sachs & Co. is a global banking, securities and investment management firm 

with its main office in New York City, New York, and is an indirectly wholly owned subsidiary 

of The Goldman Sachs Group, Inc. Goldman, Sachs & Co. became provisionally registered with 

the Commission as a swap dealer on December 31, 2012, and has been registered as an FCM 

since 1979 and as a CTA and CPO since 1990. 

1. USD ISDAFIX Setting 

ISDAF!X rates and spreads are benchmarks that indicate prevailing market rates for 

'·plain-vanilla" interest rate swaps.

4 The 11 :00 a.m. USD ISDAFIX was set during the Relevant 

Period using a combination of swap spread trade data from Swaps Broker,5 electronic trading in 

U.S. Treasuries and Eurodollars, and submissions from a panel of swap dealer banks, including 

Goldman. 

Swaps Broker's medium-term USD swap desk ("MTS Desk") functioned much like a 

traditional futures trading pit. Brokers on the desk sat (or stood) together and each serviced a 

number of major swap dealer banks, to whom they were connected throughout the trading day by 

direct phone lines and speaker boxes. The brokers communicated their clients' bids and offers 

by open outcry to the entire MTS Desk and all of the brokers simultaneously. Any client could 

accept a bid or offer. Once a broker confirmed that a client was "hitting" a bid, "lifling" an offer, 

or was otherwise "clone" in a designated notional amount (either a minimum default amount or a 

greater amount), the trade between the counterparties was executed and the counterparties 

received a confirmation of the trade. Goldman's interest rate swaps traders primarily worked 

with one broker on the MTS Desk, but at times also worked with other Swaps Broker employees, 

including brokers from Swap Broker's short-term swap desk. 

4 The term "swap" is defined in CEA Section la(47). Here, a "plain-vanilla" interest rate swap is generally an 

ongoing exchange of fixed payn1ents for floating payn1ents, \Vherein one party to a S\vap pays a fixed rate on a set 

notional amount (the party who "pays fixed" is said to have "bought" the swap, or to be "long" the swap) and the 

other party pays a floating rate generally tied to three-n1onth LIBOR (the party \Vho "receives fixed" is said to have 

"sold" the S\vap. or to be ··short'' the s\vap). 'fhe "111aturity'' or "tenor" of a S\vap refers to the nutnber of years over 

\Vhich counterparties exchange pay1nents. 

5 An interest rate swap spread trade consists ofa fixed-for-floating interest rate swap and an offsetting trade in U.S. 

Treasuries of the same maturity, which can be used to hedge part of the interest rate risk associated with the fixedfor-floating interest rate swap. The difference in basis points between the U.S. Treasury yield and the swap rate 

constitutes the "spread" quoted in a spread trade. The party who "receives fixed" in a swap and sells U.S. Treasuries 

to hedge is "short" spreads or has "sold" spreads, while a party who "pays fixed" in a swap and buys Treasuries to 

hedge is "long" spreads or has "bought" spreads. 

4 

Swaps Broker published a live feed oftransaction data for USD interest rate swap 

spreads, swap rates, and U.S. Treasury yields and prices to an electronic screen, known as the 

"19901 screen," accessible through a subscription-based market news service. The 19901 screen 

reflected the levels at which those products were trading through the MTS Desk (for swap 

spreads and swap rates) and Swaps Broker's proprietary electronic trading platform (for U.S. 

Treasury securities). The levels displayed on the 19901 screen for swap spreads were manually 

controlled by an employee of the Swaps Broker, known colloquially as the "screen guy" or 

"screen operator," who would toggle the levels up or down based on the swap spread trading 

activity that occurred before him on the MTS Desk. The 19901 screen is a reference used widely 

throughout the financial industry by swap dealer banks, hedge funds, asset managers, businesses, 

and other participants in interest rate markets. During the Relevant Period, levels displayed on 

the 1990 I screen at precisely 11 :00 a.m. were critical because they were used to set USD 

ISDAFIX. 

To set USD ISDAFIX rates for the 2-year through 30-year maturities, Swaps Broker first 

generated reference rates and spreads from the snapshot of 11 :00 a.m. 1990 I screen prices, 

reflecting either the last traded spread or the mid-point between the most recent executable bid 

and offer. Swaps Broker's reference rates, for all maturities except the I-year, were the sum of 

the reference spread and the 19901 screen's U.S. Treasury yield in the corresponding maturity. 

To generate the I-year reference rate (for which there was no associated swap spread), Swaps 

Broker utilized a combination of Eurodollar futures yields (based on trading on CME's Globex 

platform) and broker "sentiment," which was intended to reflect prevailing rates for I-year swaps 

based on trading though Swaps Broker's short-term swap desk. 

Minutes after the 11 :00 a.m. snapshot of the 19901 was taken, Swaps Broker distributed 

its reference rates and spreads to a panel of 14 or more contributing banks, which either accepted 

and submitted the reference rates and spreads as their own or submitted adjusted levels. Each 

bank, including Goldman, was expected to submit "the mean of where that dealer would itself 

offer and bid a swap in the relevant maturity for a notional equivalent amount of USD $50 

million or whatever amount is deemed market size in that currency for that maturity to an 

acknowledged dealer of good credit in the swap market."6 In making their submissions, banks 

could change the prices for all rates and spreads across all maturities in their submissions; 

change any subset, including any single rate or spread; or change none at all and simply submit 

the reference rates and spreads. Alternatively, a panel bank could make no submission at all. 

After a quorum of contributing banks made their submissions, a calculation agent eliminated the 

highest and lowest submissions (known as "topping and tailing") and averaged the remaining 

submissions. The submission and calculation process was generally completed in the half hour 

following 11 :00 a.m., after which the results were accessible to the public through a 

subscription-based news service. 

In practice, most panel banks accepted Swaps Broker's reference rates and spreads as 

their default submissions. Thus, as traders at panel banks knew, after "topping and tailing," 

6 See ISDA, ISDAFIX, https:llweb.archive.or"/web/20140209I801481http:/www2.isda.on!iasset-classeslinterestrates-derivativeslisdafix/ (last accessed August 2, 20 I 6). 

5 

Swaps Broker's reference rates and spreads usually became the final published USD ISDAFIX 

benchmarks. Goldman traders often contacted Swaps Broker's MTS Desk just after 11 :00 a.m. 

to find out where the print came out, because the traders understood that the 11 :00 a.m. print 

usually became the final published USD ISDAFIX rate. 

2. Goldman's Interest Rate Products Trading Group 

Through its Interest Rate Products Trading Group, located in downtown Manhattan, 

Goldman traded and held financial products, including swaps, swap futures, swaptions, exotic 

interest-rate derivatives ("exotics"), U.S. Treasuries and a variety of other products. Within that 

trading group, Goldman's U.S. Dollar Swap Desk in New York (the "Swap Desk" or the "swap 

desk") transacted and held, among other products, swaps, and swap futures positions. Another 

desk within that trading group, Goldman's U.S. Dollar Volatility Desk in New York (the 

"Volatility Desk" or the "volatility desk"), transacted and held, among other products, swaption 

and exotics positions. The Swap Desk was located in close proximity to the Volatility Desk. 

3. Goldman's Role in USD ISDAFIX Setting 

Throughout the Relevant Period, Goldman was one of the panel banks that submitted 

rates and spreads for the determination ofUSD ISDAFIX. Because the Swap Desk had primary 

responsibility for the U.S. Dollar swaps business, the Swap Desk was responsible for Goldman's 

USD ISDAFIX submissions. For much of the Relevant Period, the Swap Desk delegated 

ISDAFIX submissions to its primary broker at Swaps Broker, who routinely ratified the 

reference rates and spreads disseminated by Swaps Broker based on the 11 :00 a.m. "snapshot." 

Throughout the Relevant Period, Goldman did not have specific internal controls or 

procedures, written or otherwise, regarding how USD ISDAFIX submissions should be 

determined or monitored. Goldman ISDAFIX submitters received no formal training on making 

ISDAFIX submissions, and Goldman did not require submissions to be documented. 

4. Goldman's Positions with Exposure to USD ISDAFIX 

As described in more detail below, Goldman traders engaged in attempts to manipulate 

USD ISDAFIX for three primary reasons: (I) to maximize profits (or minimize losses) for the 

Swap Desk in connection with the desk's own positions in swaps priced based on the USD 

ISDAFIX (typically where other Goldman desks had effectively transferred USD ISDAFIX 

exposure to the Swap Desk) and in swap futures settlements; (2) to maximize profit (or minimize 

loss) for the Volatility Desk in connection with the desk's swaption cash settlements; and (3) at 

times to maximize profit (or minimize loss) for each desk in connection with exotics, such as 

spreadlocks, Goldman's proprietary Alpha Index products, and various constant maturity swap 

("CMS") products. 

Goldman traders' attempts to move USD ISDAFIX rates in Goldman's favor, if 

successful, hurt the firm's counterparties in cash settlements and resets, as well as any other 

market participants who had positions referencing USD ISDAFIX on a given day that were 

directionally equivalent to Goldman's counterparties' in the same maturity. A small movement 

of the benchmark higher or lower (e.g., one basis point or less) could result in meaningful gain 

for Goldman on its cash settlements. 

6 

a. Swap Positions Held by the Swap Desk 

Throughout the Relevant Period, the Swap Desk attempted to manipulate USD ISDAFIX 

to benefit its swap positions based on the benchmark ("ISDAFIX swaps"). The Volatility Desk 

often entered into ISDAFIX swaps with the Swap Desk to transfer its USD ISDAFIX exposure 

resulting from cash-settling swaptions to the Swap Desk. 

In a typical, internal ISDAFIX swap, the Swap Desk agreed in advance of 11 :00 a.m. to 

pay or receive the fixed leg of the swap at whatever rate that USD ISDAFIX set that day in the 

relevant maturity. On occasions when the Swap Desk knew it would be receiving the USD 

ISDAFIX rate from the Volatility Desk in the swap, the Swap Desk traders wanted the rate to set 

higher so that they could receive a higher fixed rate on the swap from the Volatility Desk. 

Likewise, on occasions when the Swap Desk knew it would be paying the USD ISDAFIX rate, 

swap traders wanted the rate to set lower, so that they could pay a lower fixed rate on the swap to 

the Volatility Desk. In many ISDAFIX trades, other Goldman desks were effectively 

transferring to the Swap Desk their exposure to USD ISDAFIX vis-it-vis counterparties. 

Accordingly, for every fraction of a basis point that the Swap Desk could successfully move the 

relevant USD ISDAFIX rate to Goldman's advantage, the benchmark would move to the 

disadvantage of Goldman's counterparties. 

One trader on Goldman's Volatility Desk thus referred to the USD ISDAFIX in such a 

trade as the 'jacked price" as opposed to the "fair price." Other Goldman traders appreciated 

how internal ISDAFIX trades presented an opportunity for the firm to profit. For example, in 

mid-2008, the then-head of Goldman's Interest Rate Products Trading Group in the United States 

explained why the Swap Desk should take on "as much as possible" of the Volatility Desk's 

lSDAFIX exposure: the trader expected "positive value" from these positions, especially "the 

larger size stuff," and if the Volatility Desk "EVER ha[d] any settlements that don't face the 

street," meaning non-dealer counterparties who lacked a view into the ISDAFIX setting process, 

he expected those ISDAFIX trades would also have "higher value." On this particular day, the 

Volatility Desk had not passed all of its USD ISDAFIX exposure to the Swap Desk, but that 

morning and later that day, both traders agreed that they should have "let [the Swap Desk] have 

fun with the full amount of30s [30-year swaps]." 

b. Swap Futures Positions Held by the Swap Desk 

Throughout the Relevant Period, the Swap Desk also attempted to manipulate USD 

ISDAFIX to benefit its swap futures positions by increasing payments to Goldman (or 

decreasing payments from Goldman) during settlements.7 

Goldman regularly transacted in swap futures contracts and routinely maintained net 

exposure to the settlement ofthese contracts, which occurred on a quarterly basis. The final 

settlement price of each contract was determined based on the USD ISDAFIX rate in the relevant 

7 During the Relevant Period, swap futures contracts were listed at and subject to the rules ofthe Chicago Board of 

Trade ("CBOT"). Swap futures were traded through both "open outcry" and through CME Globex. 

7 

maturity on the contract's last day of trading. Under swap future contract specifications, the 

value of the contract had an inverse relationship to USD ISDAFIX rates: when Goldman was 

long swap futures contracts, the firm would benefit from a lower USD ISDAFIX rate in the 

relevant maturity on the contract's last day of trading; when Goldman was short swap futures 

contracts, the firm would benefit from a higher USD ISDAFIX rate in the relevant maturity on 

the contract's last day of trading. Goldman's Swap Desk, a market maker in swap futures 

contracts, typically held a net Jong or net short position in multiple swap futures maturities on the 

contracts' settlement days, giving that desk a corresponding incentive to push USD ISDAFIX up 

or down in a direction that would maximize the desk's profits and minimize its losses. 

c. Swaption and Other Positions Held by the Volatility Desk 

Throughout the Relevant Period, traders on Goldman's Volatility Desk, in coordination 

with the Swap Desk, also attempted at times to manipulate USD ISDAFIX in order to benefit the 

Volatility Desk's derivatives positions, such as by increasing their payments from counterparties, 

or decreasing payments to counterparties, in swaption cash settlements. 

A so-called "European swaption," one of the primary products traded by the Volatility 

Desk, is an option to enter into a plain-vanilla fixed-for-floating interest rate swap, which must 

be exercised at 11 :00 a.m. on a specified "expiry" date in the future at a pre-agreed fixed "strike" 

rate. A swaption can be exercised by "physical" delivery of the underlying swap, or by cash 

settlement in reference to a benchmark rate. Swaption cash settlements denominated in U.S. 

Dollars are typically calculated based on USD ISDAFIX rates according to a formula which 

measures the difference between the relevant USD ISDAFIX rate on the expiry date and the 

strike rate of the swaption. In any cash-settling swaption, the Volatility Desk's incentive to push 

the USD ISDAFIX higher or lower depended on (I) whether Goldman was the owner (buyer) or 

seller of the swaption and (2) whether the swaption conferred the right to pay or receive the fixed 

rate in the underlying swap. The Volatility Desk also traded products consisting of combinations 

of swaptions, such as straddles, and other products for which cash settlements were similarly 

calculated based on the relevant USD JDAFIX rate at expiry and therefore created similar 

incentives for Goldman traders to attempt to push USD ISDAFIX rates in the firm's favor. 

Throughout the Relevant Period, traders on Goldman's Volatility Desk, in coordination 

with the Swap Desk, also attempted to manipulate USD ISDAFIX in order to benefit the desks' 

derivatives positions in connection with various exotic derivative instruments, such as 

spreadlocks,8 Goldman's proprietary Alpha Index products,9 and the periodic resets and 

8 A "spread lock" is a derivative financial instrument that allows counterparties to lock in a fixed spread to 

be paid or received in the future. Spread locks may, at times, cash settle by reference to the USD ISDAFIX. On 

occasion, Goldman's Swap and Volatility Desks entered into spreadlocks that were valued in reference to USD 

ISDAFIX. Depending on where USD ISDAFIX set on the expiry or valuation dates of these trades, the desks would 

have the opportunity to either receive more from (or pay less to) their counterparties in cash settlements. 

9 Goldman's proprietary Alpha Index products allowed clients to take positions relative to anticipated 

changes in 2-year, I 0-year, and 30-year swap rates, measured by observing prices on the 1990 I screen at various 

times of the day on observation dates, including at the 11 :00 a.m. USD ISDAFIX setting time. Goldman's clientfacing Alpha Index positions were overseen by an interest rates trading group in London ("London Exotics Desk"), 

8 

settlements of CMS products. 1

° For example, in April 2007, in anticipation of a spreadlock 

valuation based on USD ISDAFIX, a Volatility Desk trader asked the firm's USD ISDAFIX 

submitter: "Hey, can you make sure to poll high." Similarly, in December 2007, a Goldman 

Volatility Desk trader complained to a Swaps Broker employee: "[N]ow you screw up our 

isdafix resets? What's your encore?" 

5. 	 Means Employed in Goldman's Attempts to Manipulate USD 

ISDAFIX 

Given all of these financial incentives, Goldman traders understood and employed two 

primary means to attempt to manipulate USD ISDAFIX rates. One method was to bid, offer, and 

trade the instruments that could influence Swap Broker's reference rates-namely, swap spreads 

traded through Swap Broker, Eurodollar futures traded through the CME Globex platform, 

and/or U.S. Treasuries traded through Swap Broker's proprietary electronic platform-at and 

around Swaps Broker's 11 :00 a.m. print, in a manner designed to push USD ISDAFIX rates in a 

favorable direction. Another method employed by Goldman traders in attempts to manipulate 

USD ISDAFIX rates was making false submissions. 

Using each of these means, at times independently and at times in combination, Goldman 

traders sought the same illicit goal: to move USD ISDAFIX in the direction that was best for 

Goldman at the expense of its counterparties and clients. 

a. Goldman's Improper Trading Conduct 

As described below, one of Goldman traders' means to attempt to manipulate USD 

ISDAFIX involved improper trading conduct relating to the inputs to Swap Broker's 11 :00 a.m. 

print, namely, swap spreads traded through Swaps Broker, Eurodollar futures traded through 

Globex, and U.S. Treasuries traded through Swaps Broker's proprietary electronic trading 

which periodically entered into swap trades opposite the Swap Desk to offset its exposure from Alpha Index trades, 

often at rates priced in part by reference to the day's USD ISDAFIX rate and in advance of the USD ISDAFIX 

setting. When the Swap Desk knew it would be receiving based in part on the USD ISDAFIX rate from the London 

Exotics Desk, Swap Desk traders wanted the ISDAFIX rate to set higher so that they could receive a higher fixed 

rate on the swap from the London Exotics Desk. Conversely, when the Swap Desk knew it would be paying based 

in part on the USD ISDAFIX rate, Swap Desk traders wanted the rate to set lower, so that they could pay a lower 

fixed rate on the swap. As the Alpha Index-related swap trades between the Swap Desk and the London Exotics 

Desk typically transferred ISDA FIX exposure vis-a-vis clients from the London Exotics Desk to the Swap Desk, for 

every fraction of a basis point that the Swap Desk could successfully move the relevant USD ISDAFIX rates to its 

advantage, Alpha Index clients facing the London Exotics Desk were disadvantaged. 

' 

0 A "constant maturity swap," or "CMS," is a swap in which the rate of one leg of the swap is periodically 

reset (or "fixed") in reference to the then-prevailing market rate ofa specified product. The Swap Desk and the 

Volatility Desk held numerous CMS positions during the Relevant Period which periodically reset with reference to 

USD ISDAFIX. On reset or "fixing" days, depending on the terms of a given CMS product, the Swap Desk and the 

Volatility Desk could benefit from causing the relevant ISDAFIX rate to set higher or lower. Goldman traders were 

sensitive to their profits and losses in connection with CMS resets. 

9 

platform. Such trading strategies were a regular practice at Goldman, and supervisors were not 

only aware of subordinates executing such trading strategies, but at times executed them directly. 

i. Trading Swap Spreads to Affect the USD ISDAFIX 

During the Relevant Period, Goldman traders bid, offered, and/or executed swap spread 

trades at and around Swaps Broker's 11 :00 a.m. print to affect prices on the 19901 screen and 

thereby increase or decrease Swaps Broker's reference rates and spreads and influence the final 

published USO ISDAFIX. 11 To execute this strategy, Goldman's swap traders often indicated to 

their brokers their intention to achieve a certain swap spread level at 11 :00 a.m., rather a desire to 

buy or sell a specific amount of swap spreads. For example, at various times during the Relevant 

Period, Goldman swap traders told their primary broker: 

• 	 "we're going to want to keep !Os low and 5's high at 11 overall want lowest 

spreads possible" 

• 	 "11 am ... will need: 5yr, 7yr & 30yr lower & !Os higher" 

• 	 as stated in a recorded phone call: "[t]ens - I want at 3/4's for the fix. Bonds - I 

want at 53 for the fix" 

Goldman's intent to achieve certain 11 :00 a.m. print levels on such occasions was evident to 

other brokers who sat on the MTS Desk; one observed during the Relevant Period: "! don't think 

Gold[man] knows what [amount] they do at 11, that's not their main concern, it's the print that 

matters." 

In attempts to push the USO ISDAFIX higher or lower, Goldman traders were even 

willing at times to buy higher or sell lower than the market required because they expected to 

benefit their cash settlements to an extent that would likely exceed, but at least cover, any 

resulting trading losses incurred through such trading. To affect the USO ISDAFIX print at 

minimal cost, traders typically timed their trading activity to try to be the last screen-moving 

event before the 11 :00 a.m. print. When Goldman's brokers failed to achieve the critical 11 :00 

a.m. print level, or spent more than Goldman traders wanted to spend to achieve their desired 

result, Goldman traders expressed their discontent: "! should control the screen without having to 

given [sic] some loser another 50 [million notional]," the then-head of the Swap Desk 

complained in July 2007. 

In one particularly brazen attempt to manipulate USO ISDAFIX by a Goldman trader, 

captured by a contemporaneous audio recording, the Goldman trader told his primary broker to 

11 Goldman traders referred to trades that they made around 11 :00 a.m. for risk management purposes as hedging. 

When Goldman's derivative products cash-settled, reset, or otherwise fixed to a benchmark, changes in the desks' 

risk positions could potentially cause traders to seek hedging trades, depending on a variety of factors, including the 

risk profile of other positions and whether the desk wanted to keep any resulting risk. Likewise, with internal 

ISDAFIX trades between desks, the desk taking on new risk, depending on a variety of factors, might have a reason 

or desire to hedge. Irrespective of whether the Goldman traders had an interest in hedging, the traders engaged in 

attempted manipulation when they placed bids and offers or executed trades around I I :00 a.m. with the improper 

intent to move the USO ISDAFIX rate in Goldman's favor. 

IO 
arrange for the employee who operated Swaps Broker's 19901 screen to refrain from reporting 

any changes in JO-year prices that went against Goldman's interest until after 11:00 a.m. that 

day, and then directed the broker to trade whatever it took to keep the price down: 

If someone lif1s us at, ya know, I 0:59:59, you're going to be the last one to hit it back 

down and your screen guy is not going to touch it. Just have your screen guy go to coffee 

... That's why I'm calling you ten minutes before, so you can get all this worked out. 

Have your screen guy go to the bathroom. You don't need to move tens for the next ten 

minutes.... Ifsomeone lif1s us up, give it down. 

(emphasis added). The trader followed up this oral instruction to the broker with an email that 

summed up his intention to achieve the desired 11 :00 a.m. print: "spend what you need, but 

make SURE we get the print." (emphasis in original) 

ii. 	 Trading Eurodollar Futures Contracts to Affect the 

USDISDAFIX 

On occasion, during the Relevant Period, Goldman traders traded Eurodollar futures at 

and around 11 :00 a.m. in attempts to influence the final published I-year USD ISDAFIX. For 

example, in September 2009, on a day when Goldman stood to pay less to its counterparty, the 

lower the I-year USD ISDAFIX rate fixed, in connection with a cash-settling straddle swaption 

(i.e., Goldman benefited from a lower I-year USD ISDAFIX rate), a Goldman swaps trader 

asked the firm's primary MTS Desk broker "how does isda !yr get fixed. !fl put a price in !yr 

[swaps] will that affect the post and does it matter semi bond or [annual money]?" The broker, a 

few minutes later, explained that the trader could more easily impact the I-year USD ISDAFIX 

by trading Eurodollar futures, as opposed to I-year swaps, and recommended that strategy: "it 

populates auto off futures unless manually changed by strong market sentiment ... sentiment 

seems to be better bid so if you wanted lower print may be better to do futures ..." Armed with 

this knowledge, the Goldman trader both sold I-year swaps shortly before 11 :00 a.m., in an 

attempt to affect the "market sentiment" component of the I-year USD ISDAFIX, and following 

the broker's advice traded Eurodollar futures in a direction that would put downward pressure on 

the Eurodollar futures rates and thereby the related I-year USD ISDAFIX. 

iii. 	 Trading U.S. Treasuries to Affect the USD ISDAFIX 

During the Relevant Period, Goldman traders also bid, offered, and/or executed trades in 

U.S. Treasuries on Swaps Broker's electronic bond trading platform (for 2-year through 30-year 

maturities) in attempts to increase or decrease Swaps Broker's reference rates and spreads and 

thereby to influence the final published USD ISDAFIX. For example, in October 2007, when 

the firm stood to benefit from a lower I 0-year USD ISDAFIX rate in a cash-settling swaption, a 

Goldman swap trader first confirmed the desired direction of the manipulative attempt with the 

Volatility Desk ("you want a low rate fix ... correct?"); then, upon learning that the then-head of 

the Volatility Desk was "not sure ifhe wants to hedge," the swap trader replied less than a 

minute later that, regarding the 10-year USD ISDAFIX rate, "I'll just make sure it's low." In an 

effort to accomplish this goal, the swaps trader then bought I 0-year Treasuries immediately 

before 11 :00 a.m. through Swap Broker's proprietary platform, thereby attempting to put 

downward pressure on the I 0-year Treasury rate that would be an input to Swaps Broker's 

11 

reference rates and the related I 0-year USD ISDAFIX. 

b. 	 Goldman's False, Misleading, or Knowingly Inaccurate 

Submissions 

During the Relevant Period, multiple Goldman traders also attempted to manipulate the 

USD ISDAFIX by causing the firm to make false, misleading, or knowingly inaccurate 

submissions to Swaps Broker concerning swap rates and spreads. For example, in February 

2009, on a day when Goldman stood to receive more from various pension funds and other 

clients in the cash settlement of 5-year straddle swaptions the higher the 5-year USD ISDAFIX 

set (i.e., the Volatility Desk stood to benefit from a higher 5-year USD ISDAFIX rate), the 

Volatility Desk emailed Goldman's ISDAFIX submitter "can you poll high in yield on 5s for 

I lam isda," and noted "we don't need to do anything w/ you, we're going to keep the risk," 

indicating that the Volatility Desk did not intend to hedge the risk associated with the cash 

settlement. Goldman's USD ISDAFIX submitter complied, submitting a higher rate on behalf of 

Goldman in the 5-year maturity in an attempt to manipulate the 5-year USD ISDAFIX rate. 

According to one Volatility Desk trader, such communications between the Volatility 

Desk and the ISDAFIX submitter were a routine practice at Goldman, and supervisors on the 

Swaps and Volatility desks were aware of the requests and their connection to swaption cash 

settlements. Often requests from the Volatility Desk for a high or low "poll" occurred before 

11 :00 a.m., which in itself revealed that the submission requested could not have been an 

accurate reflection of where Goldman saw the swap market at 11 :00 a.m. In fact, to streamline 

the Volatility Desk's ability to attempt to manipulate the USD ISDAFIX through submissions, 

Goldman traders tried several times to gain an additional submission login from Swaps Broker 

for a Volatility Desk trader, which would allow a volatility trader to make such manipulative 

attempts directly without needing to communicate with Goldman's designated ISDAFIX 

submitter. 

6. 	 Additional Examples of Attempted Manipulation to Benefit the Swap 

Desk's and Volatility Desk's ISDAFIX-Related Derivatives Positions 

During the Relevant Period, Goldman traders on the Swap Desk and the Volatility Desk 

used various means in attempts to move USD ISDAFIX higher or lower, in order to get more 

from, or pay less to, their counterparties in swaps, swap futures, cash-settled swaptions, and 

other derivatives that referenced USD ISDAFIX. The following are additional specific examples 

and further details of Goldman traders' attempts to manipulate USD ISDAFIX rates in order to 

benefit derivatives positions that were tied to the USD ISDAFIX that day. 

• 	 ISDAFIX Swaps. In January 2007, the Swap Desk stood to gain from a lower I 0­

year USD ISDAFIX and a higher 30-year USD ISDAFIX because the desk was 

entering into two swaps opposite the Volatility Desk priced at those rates (the 

Volatility Desk faced clients in certain CMS products that were fixing based on the 

difference between those rates). To benefit the Swap Desk's positions, a Goldman 

swaps trader employed various methods in attempting to manipulate the I 0-year and 

30-year USD ISDAFIX rates. First, a few minutes before 11 :00 a.m., the trader 

called his broker and instructed, as to I 0-year spreads and 30-year spreads (referred to 

12 

as "bonds"): "Tens - I want at 3/4's for the fix. Bonds - I want at 53 for the fix." 

Shortly before 11 :00 a.m., the broker executed this instruction by engaging in trading 

activity in both I 0-year and 30-year spreads, and informing the trader shortly after 

11 :00 a.m., that he had "sold 50 down to get the thing in the tens." Second, the 

Goldman trader attempted to increase the final published 30-year USD ISDAFIX rate 

by submitting higher than Swaps Broker's reference rate. When the broker asked the 

trader why he had not also submitted a higher 30-year spread, so as to be consistent 

with his changed rate submission, the trader explained: "!just cared about the rate." 

• 	 ISDAFIX Swap. In July 2007, the Swap Desk stood to benefit from a lower 30-year 

USD ISDAFIX because it was entering into swaps opposite Goldman's London 

Exotics Desk that were priced, in part, based on that rate. These swaps were in 

connection with the London Desk's unwinding of proprietary Alpha Index positions, 

including more than $1 billion notional of 30-year swap exposure. To benefit the 

Swap Desk's positions, a Goldman swaps trader attempted to manipulate the 30-year 

ISDAFIX rate by trading swap spreads through Swaps Broker. In particular, shortly 

before 11:00 a.m., the Goldman swap trader sold a total of$425 million notional 30­

year swap spreads through Swaps Broker, thereby putting downward pressure on the 

30-year USD ISDAFIX rate. Shortly after 11 :00 a.m., the broker apologized for 

trading more 30-year spreads than the trader expected because, as the broker 

explained, he "was so anxious to cover the bids" at the lower price level in 30-year 

swap spreads "so they could not be lifted up" to a higher price level. 

• 	 Swaption Cash Settlements. In April 2008, the Volatility Desk stood to benefit 

from higher 2-year and 5-year USD ISDAFIX rates, and a lower 3-year USD 

ISDAFIX rate relative to those rates, due to the desk's positions in a 2-year/3-year/5­

year butterfly swaption that was cash-settling based on USD ISDAFIX in those 

maturities. To benefit the desk's positions, one of its traders asked the Swap Desk to 

"make sure 3s are not silly high to 2s and 5s at I Jam," i.e., to take action to prevent 

those USD ISDAFIX rates from fixing at levels unfavorable to Goldman. 

• 	 ISDAFIX Swap. In September 2008, the Swap Desk stood to benefit from a higher 

I 0-year ISDAFIX rate because the Swap Desk had agreed before 11 :00 a.m. to enter 

into a swap opposite the Volatility Desk, with the Volatility Desk paying the Swap 

Desk the I 0-year ISDAFIX rate plus a small premium, in connection with the 

Volatility Desk's cash settlement ofa $150 million notional JO-year swaption. To 

benefit the Swap Desk's position, seconds before 11 :00 a.m. a Swap Desk trader sold 

JO-year U.S. Treasuries via Swap Broker's proprietary electronic trading platform 

(transactions that could put upward pressure on the 10-year ISDAFIX rate). Later 

that day, once the JO-year ISDAFIX rate was published, a Volatility Desk trader 

complained to a Swap Desk trader about the trade, objecting to the small premium in 

light of the Swap Desk's attempts to manipulate the ISDAFIX: "So you gamed the fix 

and then charged us on top of it?" 

• 	 Swap Futures Cash Settlement. In March 2009, the Swap Desk stood to benefit 

from a higher 5-year USD ISDAFIX rate and a lower 10-year USD ISDAFIX rate 

due to cash settlements of the desk's positions in March 2009 swap futures contracts 

13 

in those maturities that day. To benefit these positions, the Swap Desk employed 

various methods of attempted manipulation to influence the 5-year and I 0-year 

ISDAFIX rates. First, shortly before 11 :00 a.m., a Goldman swap trader informed his 

broker: "we're going to want to keep I Os low and S's high at 11 [,] overall want 

lowest spreads possible." To accomplish this, just seconds before I I :00 a.m., the 

broker engaged in trading conduct, including selling I 0-year swap spreads through 

Swaps Broker, in a manner designed to push down the I 0-year USD ISDAFIX rate. 

A few minutes after I I :00 a.m., the trader and the broker referred to their attempt to 

lower the I 0-year rate just before the print, with the trader noting that "they should 

have gone down[,] there was about 7 sec" left before I I :00 a.m. Second, shortly 

before I I :00 a.m., multiple Goldman swap traders working in concert traded U.S. 

Treasuries via Swap Broker's proprietary electronic trading platform, selling 5-year 

Treasuries (which would put upward pressure on the 5-year USD ISDAFIX) and 

buying IO-year Treasuries (which would put downward pressure on the IO-year 

ISDAFIX). Third, the Goldman swap desk falsely submitted higher 5-year spreads 

and rates and lower I 0-year spreads and rates, in an additional attempt to influence 

the USD ISDAFIX rates in those maturities. As Goldman's then-head of Interest 

Rate Products in the U.S. noted in a "PnL" update later in the day, these settlements 

were "very nice for the home team." 

• 	 Swap Futures Cash Settlement. In December 2009, the Swap Desk stood to benefit 

from lower USD ISDAFIX rates in the 5-year, 7-year, and 30-year maturities, and 

from a higher USD ISDAFIX rate in the I 0-year maturity, in connection with the 

cash settlements of multiple swap futures positions in those tenors that day. To 

benefit those positions, the Swap Desk attempted to manipulate the ISDAFIX in the 

relevant maturities in multiple different ways. First, the trader notified his broker 

before I I :00 a.m. that at"! I am ... will need: Syr, 7yr & 30yr lower & IOs higher." 

The broker understood that the trader clearly had a direction in mind and wanted to 

move the market, and replied to confirm the goal: "OK[ ]will come down to timing 

and amount to spend []on keeping it there." Soon thereafter, the broker informed the 

19901 screen operator of Goldman's goals for the 5-year, 7-year, IO-year, and 30­

year USD ISDAFIX rates: "5, 7 AND 30 LOWER IO'S HIGHER." Then, shortly 

before 11:00 a.m., the broker, on Goldman's behalf bought and sold 5-year, 7-year, 

and 10-year swap spreads, amounting to billions of dollars notional, in a direction and 

a manner calculated to achieve the trader's desired result. The broker did not trade 

any 30-year swap spreads (despite the trader's instruction "will need ... 30yr lower . 

. . "),and in summarizing his trading activity at I I :00 a.m. for the trader, explained 

that a different firm had sold that maturity at the fixing (which put downward 

pressure on the 30-year ISDAFIX). The broker'.s explanation of his conduct, and the 

lack of objection or response from the trader, reflect their shared understanding that 

the goal of a lower 30-year USD ISDAFIX could be achieved at no cost to Goldman 

if another firm was selling in the targeted maturity. Second, shortly before 11 :00 

a.m., a Goldman swap trader traded 5-year, 7-year, I 0-year, and 30-year U.S. 

Treasuries via Swap Broker's proprietary electronic trading platform, in the directions 

that would push the USD ISDAFIX in each maturity in Goldman's favor. Third, the 

Swap Desk capped off its attempted trading manipulations with a false submission in 

the 5-year maturity-the maturity that represented the bulk of its USD ISDAFIX 

14 

exposure. 

• 	 ISDAFIX Swaps. In January 2012, the Swap Desk stood to benefit from a higher 

30-year USD ISDAFIX in connection with a combination of exotics products. To 

benefit the net exposure of these positions, a Goldman swaps trader bought 30-year 

swap spreads through Swaps Broker shortly before 11 :00 a.m. in an attempt to push 

the 30-year USD ISDAFIX higher. Later, the swap trader referred to these trades in a 

communication with a client who had wanted the 30-year trade, and explained that he 

had to do at least part of the trade through Swaps Broker (in the minimum notional 

size required to move the 19901 screen) instead of facing the customer (which would 

not have affected the 19901 screen): "had an isda fix" he explained, and so "had to 

pay 50k in the street (min screen size)." 

IV. 

LEGAL DISCUSSION 

A. Jurisdiction 

As set forth below, Sections 6(c), 6(d), and 9(a)(2) of the Act have long prohibited 

attempted manipulation of the prices of, or false reporting in regard to, any commodity in 

interstate commerce or for future delivery on or subject to the rules of any registered entity. 7 

U.S.C. §§ 9, l 3b, 13(a)(2) (2006). An interest rate benchmark, such as USD ISDAFIX, is a 

commodity, see Sections la(9) and (19) of the Act, 7 U.S.C. §§ la(9), (19) (2012); see also 7 

U.S.C. §§ la(4), (13) (2006), and therefore may be subject to illegal attempted manipulation, 

whatever the manipulative means may be, or false reporting. 

Here, Goldman's attempted manipulation is also proscribed by the Act for the separate 

reason that the conduct involved swaps executed or traded on a Swaps Broker desk that operated 

in practice as a "trading facility" under the Act, see 7 U.S.C. § la(34) (2006) (defining trading 

facility); 7 U.S.C. §§ 2(d)(l)(B), 2(g)(3) (2006) (limiting jurisdictional exclusions to agreements, 

contracts, or transactions not executed or traded on a trading facility). 

Lastly, as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 

2010 ("Dodd-Frank Act"), the Commission also has authority to initiate proceedings and impose 

sanctions for a broader range of manipulative conduct and false reporting, including in 

connection with any swap. See Sections 6(c)(I), 6(c)(l)(A), 6(c)(3), 6(d), and 9(a)(2) of the Act, 

7 U.S.C. §§ 9(1), 9(l)(A), 9(3), 13b, 13(a)(2) (2012), and Commission Regulations 180.1 and 

180.2, 17 C.F.R. §§ 180.1, 180.2 (2015). The Relevant Period encompasses conduct that 

occurred after the passage and effective date of the Dodd-Frank Act. 

B. Respondents Attempted to Manipulate USD ISDAFIX 

Section 9(a)(2) of the Act makes it unlawful for "[a]ny person to manipulate or attempt to 

manipulate the price of any commodity in interstate commerce, or for future delivery on or 

subject to the rules of any registered entity." 7 U.S.C. § 13(a)(2) (2006). With respect to 

conduct on or after July 16, 2011, amended Section 9(a)(2) of the Act also makes it unlawful to 

manipulate or attempt to manipulate the price of"any swap." 7 U.S.C. § 13(a)(2) (2012). 

15 

For conduct before August 15, 2011, Sections 6(c) and 6(d) of the Act authorize the 

Commission to serve a complaint and provide for the imposition of, among other things, civil 

monetary penalties and cease and desist orders if the Commission "has reason to believe that any 

person ... has manipulated or attempted to manipulate the market price of any commodity, in 

interstate commerce, or for future delivery on or subject to the rules of any registered entity, ... 

or otherwise is violating or has violated any of the provisions of[the] Act." 7 U.S.C. § 9 (2006); 

id. § 13b (2006). 

For conduct occurring on or after August 15, 2011, the Commission is authorized to serve 

a complaint and impose penalties and orders with regard to attempted manipulation in violation 

of the broader amended provisions of Sections 6(c)(I) and 6(c)(3) and the Commission 

regulations implementing those provisions. See Sections 6(c)(4)(A) and 6(d) ofthe Act, 7 

U.S.C. §§ 9(4)(A), 13b (2012). 

Sections 6( c )(I) and 6( c )(I )(A) ofthe Act prohibit the use or attempted use of any 

manipulative device, including false reporting, in connection with any swap or contract of sale of 

any commodity in interstate commerce, or for future delivery, 7 U.S.C. §§ 9(1), 9(l)(A) (2012), 

and Commission Regulation 180.l(a), 17 C.F.R. § 180. I (a) (2015), makes it "unlawful ... , 

directly or indirectly, in connection with any swap, or contract of sale of any commodity in 

interstate commerce, or contract for future delivery on or subject to the rules of any registered 

entity, to ... (I) [u]se ... or attempt to use ... any manipulative device; (2) [m]ake, or attempt 

to make, any untrue or misleading statement of a material fact or to omit to state a material fact 

necessary in order to make the statements made not untrue or misleading; (3) [e]ngage, or 

attempt to engage, in any act, practice, or course of business, which operates or would operate as 

a fraud or deceit upon any person; or, (4) [d]eliver or cause to be delivered, or attempt to deliver 

or cause to be delivered, for transmission through the mails or interstate commerce, ... a false or 

misleading or inaccurate report concerning ... market information or conditions that affect or 

tend to affect the price of any commodity in interstate commerce." 

Section 6(c)(3) of the Act prohibits the attempted manipulation of the price of any 

commodity in interstate commerce, 7 U.S.C. § 9(3) (2012), and Commission Regulation 180.2, 

17 C.F.R. § 180.2 (2015), makes it "unlawful ... directly or indirectly, to ... attempt to 

manipulate the price of any swap, or of any commodity in interstate commerce, or for future 

delivery on or subject to the rules of any registered entity." 

To prove attempted manipulation under each of these provisions, the following two 

elements are required: (I) an intent to affect market price, and (2) an overt act in furtherance of 

that intent. See In re Hohenberg Bros. Co. [1975-77 Transfer Binder] Comm. Fut. L. Rep. 

(CCH) ~ 20,271, at 21,477 (CFTC Feb. 18, 1977). To prove the intent element of attempted 

manipulation, the respondent must have "acted (or failed to act) with the purpose or conscious 

object of causing or effecting a price or price trend in the market that did not reflect the 

legitimate forces of supply and demand." In re Indiana Farm Bureau Coop. Ass 'n, [1982-1984 

Transfer Binder] Comm. Fut. L. Rep. (CCH) ~ 21,796, at 27,283 (CFTC Dec. 17, 1982). 

"[W]hile knowledge of relevant market conditions is probative of intent, it is not necessary to 

prove that the accused knew to any particular degree of certainty that his actions would create an 

artificial price. It is enough to present evidence from which it may reasonably be inferred that 

the accused 'consciously desire[d] that result, whatever the likelihood of that result happening 

16 

from his conduct."' Id. (quoting United States v. US. Gypsum Co., 438 U.S. 442, 445 (1978)). 

A profit motive may also be evidence of intent, although profit motive is not a necessary element 

of an attempted manipulation. See In re DiPlacido [2007-2009 Transfer Binder] Comm. Fut. L. 

Rep. (CCH) ~ 30,970, at 62,484 (CFTC Nov. 5, 2008) (citing In re Hohenberg Bros. Co., [1975­

1977 Transfer Binder] Comm. Fut. L. Rep. (CCH) at 21,478)), ajj"d sub. nom. DiPlacido v. 

CFTC, 364 Fed. App'x 657 (2d Cir. 2009). It is also not necessary that there be an actual effect 

on price. See CFTC v. Amaranth Advisors, L.L.C., 554 F. Supp. 2d 523, 533 (S.D.N.Y. 2008). 

1. 	 Respondents Attempted to Manipulate USD ISDAFIX Through 

Improper Trading Conduct 

As evidenced by the communications among Goldman traders and between Goldman 

traders and their brokers, as well as their actual trading conduct, Goldman traders specifically 

intended to manipulate USD ISDAFIX by placing bids or offers or executing trades in the 

moments leading into 11 :00 a.m. designed in a manner, including timing and pricing, to increase 

or decrease swap spreads at 11 :00 a.m., with the intent to affect levels reported on the 19901 

screen and USD lSDAFIX fixings. Moreover, the evidence reflects that the traders intended 

such trading conduct to affect the fixings in order to benefit Goldman's trading positions against 

the firm's counterparties. 

The Goldman traders' bids, offers, and executed trades in the moments leading into 11 :00 

a.m., which were intended to affect USD ISDAFJX, as well as the traders' communications with 

each other and with their Swaps Broker brokers to plan and execute this trading conduct, 

constituted overt acts in furtherance of their intent to affect USD ISDAFIX. The Goldman 

traders thereby engaged in acts of attempted manipulation in violation of Sections 6(c), 6(d), and 

9(a)(2) of the Act, 7 U.S.C. §§ 9, 13b, 13(a)(2) (2006). Additionally, with respect to conduct 

occurring on or after August 15, 2011, Goldman engaged in acts of attempted manipulation in 

violation of Section 6(c)(3), 7 U.S.C. § 9(3) (2012), and Regulation 180.2, 17 C.F.R. § 180.2 

(2015), and they used or attempted to use a manipulative device in violation of Sections 6( c )(1) 

and 6(c)(l)(A), 7 U.S.C. §§ 9(1), 9(l)(A) (2012), and Regulation 180. l(a), 17 C.F.R. § 180. l(a) 

(2015). 

2. 	 Respondents Attempted to Manipulate USD ISDAFIX Through False, 

Misleading, or Knowingly Inaccurate Submissions 

As evidenced by communications among Goldman traders, as well as Goldman's USD 

lSDAFIX submissions themselves, Goldman traders specifically intended to affect the rate at 

which USD ISDAFIX was set by making false, misleading, or knowingly inaccurate submissions 

to Swaps Broker for inclusion in the calculation of the daily rates. At times during the Relevant 

Period, Goldman submitted market information, specifically rates that were supposed to reflect 

the mean of where Goldman would itself offer and bid a USD denominated swap in the relevant 

maturity to an acknowledged dealer of good credit, to Swaps Broker that were used as part of the 

process for determining the daily USD ISDAFIX rate for the various maturities. However, rather 

than submitting rates and spreads that reflected Goldman's honest view of the true costs of 

entering into a standard USD interest-rate swap in particular maturities, Goldman at times 

knowingly made submissions with the intent to move USD ISDAFIX rates higher or lower in 

order to benefit Goldman's trading positions. Through its false, misleading, or knowingly 

17 

inaccurate submissions, Goldman attempted to manipulate USD ISDAFIX for numerous tenors. 

The Goldman traders' oral and written requests for certain rates to be submitted which 

would benefit their trading positions, and the submissions resulting from those requests, 

constituted overt acts in furtherance of the traders' intent to affect USD ISDAFIX. By doing so, 

the Goldman traders engaged in acts of attempted manipulation in violation of Sections 6( c ), 

6(d), and 9(a)(2) of the Act, 7 U.S.C. §§ 9, 13b, 13(a)(2) (2012). Additionally, with respect to 

conduct occurring on or after August 15, 2011, the Goldman traders engaged in acts of attempted 

manipulation in violation of Section 6(c)(3), 7 U.S.C. § 9(3) (2012), and Regulation 180.2, 17 

C.F.R. § 180.2 (2015), and they used or attempted to use a manipulative device in violation of 

Sections 6(c)(l) and 6(c)(l )(A), 7 U.S.C. §§ 9(1), 9(1 )(A) (2012), and Regulation 180. l(a), 17 

C.F.R. § 180.l(a)(2015). 

C. 	 Respondents Made False, Misleading, or Knowingly Inaccurate Reports 

Concerning USD ISDAFIX in Violation of Section 9(a)(2) of the Act 

In addition to the prohibition on attempted manipulation contained in Section 9(a)(2) of 

the Act, that provision also makes it unlawful for any person "knowingly to deliver or cause to 

be delivered for transmission through the mails or interstate commerce by telegraph, telephone, 

wireless, or other means of communication false or misleading or knowingly inaccurate reports 

concerning crop or market information or conditions that affect or tend to affect the price of any 

commodity in interstate commerce." 7 U.S.C. § 13(a)(2) (2006); see also United States v. 

Brooks, 681F.3d678 (5th Cir. 2012); United States v. Valencia, 394 F.3d 352 (5th Cir. 2004); 

CFTC v. Johnson, 408 F. Supp. 2d 259, 267 (S.D. Tex. 2005). 

From time to time during the Relevant Period, Goldman, through electronic and 

telephonic transmission of information to Swaps Broker, knowingly delivered or caused to be 

delivered the firm's USD Dollar ISDAFIX submissions through the mails or interstate 

commerce. Goldman's submissions were also delivered through the mails or interstate 

commerce through daily dissemination and publication globally, including throughout the United 

States, of the official published rates for USD ISDAFIX, as determined by averaging the 

submissions of Goldman and other panel banks after "topping and tailing." Data on submissions 

themselves were also disseminated. Goldman's daily USD ISDAFIX submissions contained 

market information concerning the mean of where Goldman would itself offer and bid a swap in 

the relevant maturity to an acknowledged dealer of good credit in the swap market absent intent 

to manipulate USD ISDAFIX. Such market information affected or tended to affect the prices of 

commodities in interstate commerce, including the daily fixing rates for USD ISDAFIX, as well 

as the on-exchange interest rate swap futures and other financial instruments which relied upon 

those rates. 

From time to time during the Relevant Period, Goldman's USD ISDAFIX submissions 

constituted false, misleading, or knowingly inaccurate reports because they purported to reflect 

Goldman's honest view of the true costs of entering into a standard fixed-for-floating interest 

rate swap in particular tenors, but in fact reflected traders' desire to move USD ISDAFIX higher 

or lower in order to benefit their positions. 

By using these impermissible factors in making its USD ISDAFIX submissions and 

18 

without disclosing that it based its submissions on these impermissible factors, Goldman 

conveyed false, misleading, or knowingly inaccurate information that the rates it submitted were 

based on the prices at which Goldman would offer and bid swaps to an acknowledged dealer of 

good credit in the swaps market absent intent to manipulate USD ISDAFIX. Moreover, certain 

Goldman submitters and traders knew that Goldman's USD ISDAFIX submissions contained 

false, misleading, or knowingly inaccurate information. By such conduct, Respondents violated 

Section 9(a)(2) of the Act, 7 U.S.C. § 13(a)(2) (2006). 

D. 	 The Goldman Sachs Group, Inc. and Goldman, Sachs & Co. Arc Liable for 

the Acts of their Agents 

Section 2(a)(l )(B) of the Act, 7 U.S.C. § 2(a)(l )(B) (2012), and Regulation 1.2, 17 

C.F.R. § 1.2 (2015), provide that "[t]he act, omission, or failure of any official, agent, or other 

person acting for any individual, association, partnership, corporation, or trust within the scope 

of his employment or office shall be deemed the act, omission, or failure of such individual, 

association, partnership, corporation, or trust." Pursuant to Section 2(a)(l)(B) of the Act and 

Commission Regulation 1.2, strict liability is imposed on principals for the actions of their 

agents. See, e.g., Rosenthal & Co. v. CFTC, 802 F.2d 963, 966 (7th Cir. 1986); DohmenRamirez & Wellington Adviso1y, Inc. v. CFTC, 837 F.2d 847, 857-58 (9th Cir. 1988); CFTC v. 

Byrnes, 58 F. Supp. 3d 319, 324 (S.D.N.Y. 2014). 

The Goldman Sachs Group, Inc. and Goldman, Sachs & Co. are liable for the acts, 

omissions, and failures of any traders, managers, and submitters who acted as their employees 

and/or agents in the conduct described above. Accordingly, as set forth above, The Goldman 

Sachs Group, Inc. and Goldman, Sachs & Co. violated Sections 6(c), 6(d), and 9(a)(2) of the Act, 

7 U.S.C. §§ 9, 13b, 13(a)(2) (2006); Sections 6(c)(l), 6(c)(l)(A), 6(c)(3), 6(d), and 9(a)(2), 7 

U.S.C. 	§§ 9(1), 9(1)(A), 9(3), 13b, 13(a)(2) (2012); and Regulations 180.l(a) and 180.2, 17 

C.F.R. 	§§ 180.l(a), 180.2 (2015). 

v. 

FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that Respondents violated Sections 6( c ), 

6(d), and 9(a)(2) of the Act, 7 U.S.C. §§ 9, 13b, 13(a)(2) (2006), and for conduct occurring on or 

after August 15, 2011, Sections 6(c)(l), 6(c)(l)(A), 6(c)(3), 6(d), and 9(a)(2), 7 U.S.C. §§ 9(1), 

9(l)(A), 9(3), 13b, 13(a)(2) (2012), and Regulations 180.l(a) and 180.2, 17 C.F.R. §§ 180.l(a), 

180.2 (2015). 

VI. 

OFFER OF SETTLEMENT 

Respondents, without admitting or denying the findings or conclusions herein, have 

submitted the Offer in which they: 

A. 	 Acknowledge receipt of service of this Order; 

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B. 	 Admit the jurisdiction of the Commission with respect to this Order only and for 

any action or proceeding brought or authorized by the Commission based on 

violation of or enforcement of this Order; 

c. 	 Waive: 

l. 	 the filing and service of a complaint and notice of hearing; 

2. 	 a hearing; 

3. 	 all post-hearing procedures; 

4. 	 judicial review by any court; 

5. 	 any and all objections to the participation by any member of the 

Commission's staff in the Commission's consideration of the Offer; 

6. 	 any and all claims that they may possess under the Equal Access to Justice 

Act, 5 U.S.C. § 504 (2012) and 28 U.S.C. § 2412 (2012), and/or the rules 

promulgated by the Commission in conformity therewith, Part 148 of the 

Commission's Regulations, 17 C.F.R. §§ 148.1-30 (2015), relating to, or 

arising from, this proceeding; 

7. 	 any and all claims that they may possess under the Small Business 

Regulatory Enforcement Fairness Act of 1996, Pub. L. No. 104-121, §§ 

201-253, 110 Stat. 847, 857-868 (1996), as amended by Pub. L. No. 110­

28, § 8302, 121 Stat. 112, 204-205 (2007), relating to, or arising from, this 

proceeding; and 

8. 	 any claims of Double Jeopardy based on the institution of this proceeding 

or the entry in this proceeding of any order imposing a civil monetary 

penalty or any other relief; 

D. 	 Stipulate that the record basis on which this Order is entered shall consist solely 

of the findings contained in this Order to which Respondents have consented in 

the Offer; and 

E. 	 Consent, solely on the basis of the Offer, to the Commission's entry of this Order 

that: 

l. 	 makes findings by the Commission that Respondents violated Sections 

6(c), 6(d), and 9(a)(2) of the Act, 7 U.S.C. §§ 9, 13b, 13(a)(2) (2006), and 

for conduct occurring on or after August 15, 2011, Sections 6( c )(I), 

6(c)(l)(A), 6(c)(3), 6(d), and 9(a)(2), 7 U.S.C. §§ 9(1), 9(l)(A), 9(3), 13b, 

13(a)(2) (2012), and Regulations 180.l(a) and 180.2, 17 C.F.R. §§ 

180.l(a), 180.2 (2015); 

2. 	 orders Respondents to cease and desist from violating Sections 6(c)(l), 

20 

6(c)(l)(A), 6(c)(3), 6(d), and 9(a)(2) of the Act, 7 U.S.C. §§ 9(1), 9(l)(A), 

9(3), 13b, 13(a)(2) (2012), and Commission Regulations 180.l(a) and 

180.2, 17 C.F.R. §§ 180.l(a), 180.2 (2015); 

3. 	 orders Respondents to pay a civil monetary penalty in the amount of one 

hundred twenty million U.S. dollars ($120,000,000) plus post-judgment 

interest; and 

4. 	 orders Respondents and their successors and assigns to comply with the 

conditions and undertakings consented to in the Offer and as set forth in 

Part VII of this Order. 

F. 	 Respondents represent that they have already undertaken certain steps intended to 

make reasonable efforts to ensure the integrity of any submission to, and trading 

in connection with, certain benchmarks to which Goldman submits or submitted, 

including ISDAFIX and its successor benchmark (see supra footnote 2), 

including, but not limited to, the following: 

1. 	 Respondents have conducted a global review of risks relating to 

benchmarks, including of the processes and controls governing their 

participation in benchmark rates, including USD ISDAFIX, and have 

reaffirmed their prohibition on manipulation and attempted manipulation 

of benchmark rates specifically (in addition to existing broad prohibitions 

on market manipulation); 

2. 	 Respondents enhanced controls and processes surrounding their 

participation in benchmarks (including interest-rate swap benchmarks), 

including but not limited to: 

a. 	 Enhanced guidance relating to the appropriate source of 

benchmark contribution information, including the implementation 

of automated and/or transaction-based contributions where 

possible, as well as identification and mitigation of potential 

conflicts of interest relating to Respondents' trading in products 

affected by the relevant benchmark; 

b. 	 Required prior approval of all contributions to benchmarks by a 

Securities Division PMD, including the identification of 

contributing individuals and their supervisors; 

c. 	 Implementation of record keeping of benchmark contributions and 

the methodologies for establishing contributions; 

d. 	 Establishment of a Contribution Working Group comprised of 

Compliance personnel, which meets regularly to discuss topics and 

potential risks relating to benchmark contributions; 

21 

c. 	 Annual review of each benchmark contribution by the relevant 

approver (a Securities Division PMD), as well as quarterly 

attestations by trading supervisors and employees regarding 

compliance with established policies; 

f. 	 Enhanced control framework and governance, including 

developing appropriate escalation procedures for both internal and 

external conduct relating to benchmarks, and mandating periodic 

review and audit of contributions to benchmarks. 

3. 	 Respondents enhanced controls and processes relating to their prohibition 

on benchmark contributions (and trading generally) intended to mislead or 

manipulate the market, including but not limited to: 

a. 	 Development of daily reports showing upcoming expiries 

potentially referencing ISDAFIX, as well as additional trading and 

position surveillances, designed to detect potential manipulation of 

benchmark rates through trading and/or related communications; 

b. 	 As part of enhanced training of all employees on the submitting 

and trading desks regarding market manipulation, additional 

discussion concerning improper submission and trading practices; 

c. 	 Enhanced policies and procedures providing additional guidance 

regarding benchmark contributions and market manipulation 

generally. 

Upon consideration, the Commission has determined to accept the Offer. 

VII. 

ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. 	 Respondents shall cease and desist from violating Sections 6(c)(l), 6(c)(J)(A), 

6(c)(3), 6(d), and 9(a)(2) of the Act, 7 U.S.C. §§ 9(1), 9(l)(A), 9(3), 13b, 13(a)(2) 

(2012), and Commission Regulations 180.l(a) and 180.2, 17 C.F.R. §§ 180.l(a), 

180.2 (2015). 

B. 	 Respondents shall pay a civil monetary penalty of one hundred twenty million 

U.S. dollars ($120,000,000), within ten (IO) days ofthe date of entry of this Order 

(the "CMP Obligation"). Ifthe CMP Obligation is not paid in full within ten (I 0) 

days of the date of entry of this Order, then post-judgment interest shall accrue on 

the CMP Obligation beginning on the date of entry ofthis Order and shall be 

determined by using the Treasury Bill rate prevailing on the date of entry ofthis 

Order pursuant to 28 U.S.C. § 1961 (2012). Respondents shall pay the CMP 

Obligation by electronic funds transfer, U.S. postal money order, certified check, 

22 

bank cashier's check, or bank money order. If payment is to be made other than 

by electronic funds transfer, then the payment shall be made payable to the 

Commodity Futures Trading Commission and sent to the address below: 

Commodity Futures Trading Commission 

Division of Enforcement 

ATTN: Accounts Receivables 

DOT/FAA/MMAC/AMZ-341 

CFTC/CPSC/SEC 

6500 S. MacArthur Blvd. 

Oklahoma City, OK 73169 

Telephone: (405) 954-7262 

Nikki.gibson@faa.gov 

If payment is to be made by electronic funds transfer, Respondents shall contact 

Nikki Gibson or her successor at the above address to receive payment 

instructions and shall fully comply with those instructions. Respondents shall 

accompany payment of the CMP Obligation with a cover letter that identifies the 

Respondents and the name and docket number of this proceeding. The 

Respondents shall simultaneously transmit copies of the cover letter and the form 

of payment to the Chief Financial Officer, Commodity Futures Trading 

Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, D.C. 

20581. 

C. 	 Respondents and their successors and assigns shall comply with the following 

undertakings set forth in the 0 ffer: 

1. 	 REMEDIATION 

As set forth above in Section VI, paragraph F, Respondents represent that 

they have already undertaken and continue to undertake extensive remedial 

measures to implement and strengthen Respondents' internal controls and 

procedures relating to the fixing of interest-rate swaps benchmarks and related 

supervision of Respondents' swaps, options (volatility), and exotics desks. With 

respect to Respondents' remediation efforts to the extent not already undertaken, 

Respondents undertake that: 

a. 	 Respondents will implement and improve their internal controls 

and procedures in a manner reasonably designed to ensure the 

integrity of the fixing of any interest-rate swap benchmark, 

including measures to identify and address internal or external 

conflicts of interest; 

b. 	 Respondents' remediation improvements will include established 

internal controls and procedures relating to: 

i. 	 measures designed to enhance the detection and deterrence 

23 

of improper communications concerning interest-rate swap 

benchmarks, including the form and manner in which 

communications may occur; 

ii. 	 monitoring systems designed to enhance the detection and 

deterrence of trading or other conduct potentially intended 

to manipulate directly or indirectly swap rates, including 

benchmarks based on interest-rate swaps; 

iii. 	 periodic audits, at least annually, of Respondents' 

participation in the fixing of any benchmark based on 

interest-rate swaps; 

iv. 	 supervision of trading desks that participate in the fixing of 

any benchmark based on interest-rate swaps; 

v. 	 supervision of trading desk conduct that relates to any 

interest-rate swap benchmark; 

vi. 	 routine and ongoing training of all traders, supervisors and 

others who are (1) involved in the fixing of any benchmark 

based on interest-rate swaps or (2) oversee supervisors or 

desk heads involved in the fixing of any benchmark based 

on interest rate swaps; 

vii. 	 routine and on-going training of all trading desk personnel 

and supervisors relating to the trading of any product that 

references a benchmark based on interest-rate swaps; 

viii. 	 processes for the periodic but routine review of written and 

oral communications of any traders, supervisors and others 

who are involved in the fixing of any benchmark based on 

interest-rate swaps with the review being documented and 

documentation being maintained for a period of three (3) 

years; and 

ix. 	 maintain a system for reporting, handling and investigating 

any suspected misconduct or questionable, unusual or 

unlawful activity relating to the fixing of any benchmark 

based on interest-rate swaps with escalation to compliance 

and legal, and with reporting of material matters to the 

executive management of Respondents and the 

Commission, as appropriate; the Respondents shall 

maintain the record basis of the handling of each such 

matter for a period of three (3) years. 

c. 	 Within 120 days of the entry of this Order, Respondents shall make 

a report to the Commission, through the Division, concerning their 

24 

remediation efforts before and since the entry of this Order. 

Within 365 days of the entry of this Order, Respondents shall 

submit a report to the Commission, through the Division, 

explaining how Respondents have complied with the undertakings 

set forth herein. The report shall contain a certification from a 

representative of Respondents' Executive Management, after 

consultation with Respondents' chief compliance officer(s) and 

any other applicable parties, that Respondents have complied with 

the undertakings set forth above, and that Respondents have 

established policies, procedures, and controls to satisfy the 

undertakings set forth in the Order. 

d. 	 In addition to and apart from the Executive Management 

certification required in Section C(!)(c), the Goldman supervisor 

responsible for oversight of the firn1's United States interest rate 

derivatives trading business (i.e., the most senior supervisor of the 

firm's swaps, volatility, exotics, and U.S. Treasuries trading desks) 

shall provide a sworn certification, after consultation with 

Goldman's chief compliance officer(s) and any other applicable 

parties, that (i) he or she has reviewed the Section C(l)(c) report 

required within 365 days of the entry of this Order concerning 

Goldman's compliance with the undertakings set forth herein; (ii) 

based on his or her knowledge, the report does not contain any 

untrue statement of a material fact or omit to state a material fact 

necessary in order to make the statements made, in light of the 

circumstances under which such statements were made, not 

misleading with respect to the period covered by the report; (iii) 

based on his or her role with respect to the relevant trading desks, 

he or she has evaluated the effectiveness of the internal controls 

and procedures implemented by Goldman and reported his or her 

evaluation to Goldman's chief compliance officer(s) and any other 

applicable parties; and (iv) with respect to the undertakings in 

Section C(l)(a) and (b)(i) through (b)(ix), specifies his or her 

personal knowledge of and/or involvement in Goldman's efforts to 

implement each undertaken improvement in internal controls and 

procedures. The certification described in this paragraph shall be 

sworn and delivered to the Commission, through the Division, 

within 365 days of the entry of this Order. 

2. 	 COOPERATION WITH THE COMMISSION 

In this action, and in any investigation or other action instituted by the 

Commission related to the subject matter of this action, Respondents shall 

cooperate fully and expeditiously with the Commission, including the Division. 

As part of such cooperation, Respondents agree to the following for a period of 

three (3) years from the date of the entry of this Order, or until all related 

investigations and litigations in which the Commission, including the Division, is 

25 
a party, are concluded, including through the appellate review process, whichever 

period is longer: 

a. Preserve all records relating to the subject matter of this 

proceeding, including, but not limited to, audio files, electronic 

mail, other documented communications, and trading records; 

b. Comply fully, promptly, completely, and truthfully with all 

inquiries and requests for non-privileged information or 

documents; 

c. Provide authentication of documents and other evidentiary 

material; 

d. Provide copies of non-privileged documents within Respondents' 

possession, custody, or control; 

c. Subject to applicable laws and regulations, make their best efforts 

to produce any current (as of the time of the request) officer, 

director, employee, or agent of Respondents, regardless of the 

individual's location, and at such location that minimizes 

Commission travel expenditures, to provide assistance at any trial, 

proceeding, or Commission investigation related to the subject 

matter of this proceeding, including, but not limited to, requests for 

testimony, depositions, and/or interviews, and to encourage them 

to testify completely and truthfully in any such proceeding, trial, or 

investigation; and 

f. Subject to applicable laws and regulations, make their best efforts 

to assist in locating and contacting any prior (as of the time of the 

request) officer, director, employee, or agent of Respondents; 

Respondents also agree that they will not undertake any act that would 

limit their ability to cooperate fully with the Commission. Respondents will 

designate an agent located in the United States of America to receive all requests 

for information pursuant to these Undertakings, and shall provide notice regarding 

the identity of such Agent to the Division upon entry of this Order. Should 

Respondents seek to change the designated agent to receive such requests, notice 

of such intention shall be given to the Division fourteen (14) days before it 

occurs. Any person designated to receive such request shall be located in the 

United States of America. 

3. PROHIBITED OR CONFLICTING UNDERTAKINGS 

Should the Undertakings herein be prohibited by, or be contrary to, the 

provisions of any obligations imposed on Respondents by any presently existing, 

or hereinafter enacted or promulgated laws, rules, regulations, or regulatory 

mandates, then Respondents shall promptly transmit notice to the Commission 

26 

(through the Division) of such prohibition or conflict, and shall meet and confer in 

good faith with the Commission (through the Division) to reach an agreement 

regarding possible modifications to the Undertakings herein sufficient to resolve 

such inconsistent obligations. In the interim, Respondents will abide by the 

obligations imposed by the laws, rules, regulations, and regulatory mandates. 

Nothing in these Undertakings shall limit, restrict or narrow any obligations 

pursuant to the Act or the Commission's Regulations promulgated thereunder, 

including, but not limited to, Regulations 1.31 and 1.35, 17 C.F.R. §§ 1.31, 1.35 

(2015), in effect now or in the future. 

4. PUBLIC STATEMENTS 

Respondents agree that neither they nor any of their successors and 

assigns, agents, or employees under their authority or control shall take any action 

or make any public statement denying, directly or indirectly, any findings or 

conclusions in this Order or creating, or tending to create, the impression that this 

Order is without a factual basis; provided, however, that nothing in this provision 

shall affect Respondents' (i) testimonial obligations, or (ii) right to take positions 

in other proceedings to which the Commission is not a party. Respondents and 

their successors and assigns shall undertake all steps necessary to ensure that all 

of their agents and/or employees under their authority or control understand and 

comply with this agreement. 

5. PARTIAL SATISFACTION 

Respondents understand and agree that any acceptance by the Commission 

of partial payment of Respondents' CMP Obligation shall not be deemed a waiver 

of their obligation to make further payments pursuant to this Order, or a waiver of 

the Commission's right to seek to compel payment of any remaining balance. 

The provisions of this Order shall be effective as of this date. 

By the Commission. 

Secretary of the Commission 

Commodity Futures Trading Commission 

Dated: December 21, 2016 

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