UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

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In the Matter of: 

Goldman Sachs & Co. LLC, f/k/a 

Goldman, Sachs & Co., CFTC Docket No. 20-10 

Respondent. 

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ORDER INSTITUTING PROCEEDINGS PURSUANT TO 

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

FINDINGS, AND IMPOSING REMEDIAL SANCTIONS 

I. INTRODUCTION 

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

from in or about January 2014 to February 2014 ("Relevant Period"), Goldman, Sachs & Co. 

(now known as Goldman Sachs & Co. LLC) ("Goldman" or "Respondent") violated Regulations 

23.202(a)(l), (b)(l), and 23.203(b)(2), 17 C.F.R. §§ 23.202(a)(l), (b)(l) (2018), 23.203(b)(2) 

(2017), of the Commission Regulations ("Regulations") promulgated under the Commodity 

Exchange Act ("Act"), 7 U.S.C. §§ 1-26 (2012). Therefore, the Commission deems it 

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

instituted to determine whether Respondent engaged in the violations set forth herein and to 

determine whether any order should be issued imposing remedial sanctions. 

In anticipation of the institution of an administrative proceeding, Respondent has 

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

Without admitting or denying any of the findings or conclusions herein, Respondent consents to 

the entry of this Order Instituting Proceedings Pursuant to Section 6( c) and ( d) of the Commodity 

Exchange Act, Making Findings, and Imposing Remedial Sanctions ("Order") and acknowledges 

service of this Order. 1 

1 Respondent consents to the use of the findings of fact and conclusions oflaw in this Order in this proceeding and 

in any other proceeding brought by the Commission or to which the Commission is a party or claimant, and agrees 

that they shall be taken as true and correct and be given preclusive effect therein, without further proof. Respondent 

does not consent, however, to the use of this Order, or the findings or conclusions herein, as the sole basis for any 

other proceeding brought by the Commission or to which the Commission is a party or claimant, other than: a 

proceeding in bankruptcy or receivership; or a proceeding to enforce the terms of this Order. Respondent does not 

consent to the use of the Offer or this Order, or the findings or conclusions in this Order, by any other party in any 

other proceeding. 
II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

During an investigation by the Commission's Division of Enforcement ("Division"), the 

Division requested that Goldman produce certain audio recordings on dates in January 2014, 

which Goldman, as a swap dealer, was required to make and keep. Goldman was unable to 

produce many of the recordings requested by the Division due to a recording error caused by a 

malfunction during the course of a system upgrade that affected recordings of the phone lines of 

a trading and sales desk in one of Goldman's offices for twenty calendar days in January and 

February 2014. Goldman's inability to produce these recordings impeded the Division's 

ongoing investigation, because the Division was unable to obtain the information that should 

have been captured in many of the recordings through any other means. 

B. RESPONDENT 

Goldman Sachs & Co. LLC, formerly known as Goldman, Sachs & Co., is a global 

banking, securities, and investment management firm with its main office in New York, New 

York. Goldman has been provisionally registered with the Commission as a swap dealer since 

December 31, 2012, and has been registered as an FCM since 1979 and as a CT A and CPO since 

1990. 

C. FACTS 

To comply with its recordkeeping obligations as a swap dealer under Part 23 of the 

Regulations, 17 C.F.R. pt. 23 (2018), and in particular its obligations to make and keep 

recordings of certain oral communications concerning trading in swaps and related cash and 

forward transactions pursuant to Regulations 23.202(a)(l) and (b)(l), and 23.203(b)(2), 17 

C.F.R. §§ 23.202(a)(l), (b)(l) (2018), 23.203(b)(2) (2017),2 Goldman began using recording 

hardware to record the phone lines of its trading and sales desks in late March 2013. 

In the early morning of January 18, 2014, as part of an installation of a Microsoft security 

patch on certain software Goldman used in one of its offices, Goldman shut down and then 

restarted its servers. Before Goldman's servers had finished powering back up, the recording 

hardware that Goldman utilized started prematurely. As a result, the recording hardware did not 

properly resume recording, nor did the hardware's failsafe alarm alert Goldman to the failure and 

in turn initiate a backup recording system. While the recording hardware continued to record 

metadata associated with calls and to create audio recording files, the audio files created were 

blank. At the time, Goldman had followed the vendor's configuration instructions and was 

unaware of the vulnerability of the recording hardware it utilized to re-starting prematurely. 

Goldman did not, however, take any steps to verify that the system was functioning properly and 

capturing audio after the system upgrade. 

2 After the Relevant Period, the retention period for recordings of oral communications was moved from Regulation 

23 .203(b )(2) to Regulation 1.31 (b )(2), 17 C.F.R. § 1.31 (b )(2) (2018), but it continues to be one year. 

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On February 7, 2014, the physical desk locations of certain personnel in the affected 

office were changed. That same day, when Goldman conducted a spot-check of the recording 

system in that office because of the physical desk location changes, it discovered the recording 

error. After discovering the error, Goldman consulted with the vendor that had provided the 

recording hardware, identified the issue, and re-engaged the recording system to record properly 

beginning in the early morning of February 8. 

Following the discovery of the recording failure, Goldman put in place a number of 

measures to decrease the likelihood of such an error recurring, and to catch such an error more 

promptly should one occur. 

The Division subsequently opened an unrelated investigation that concerned the affected 

office and requested that Goldman produce certain audio recordings for dates within the twentycalendar-day period of the recording failure described above. Because of the recording failure, 

Goldman was unable to produce a significant number of the requested recordings. The Division 

learned of Goldman's failure to keep and maintain the recordings when Goldman informed the 

Division it was unable to produce them. Goldman's failure to keep, maintain, and produce the 

requested records impeded the Division's investigation, because the Division was unable to 

obtain the information that should have been captured in many of the recordings through any 

other means. 3 

III. LEGAL DISCUSSION 

Regulation 23.202(a)(l) and (b)(l), 17 C.F.R. § 23.202(a)(l), (b)(l) (2018), requires, in 

relevant part, every swap dealer to keep daily trading records of all swaps and related cash and 

forward transactions it executes, including, specifically a record of all oral communications 

provided or received concerning quotes, solicitations, bids, offers, instructions, trading, and 

prices that led to the execution of a swap transaction or the conclusion of a related cash or 

forward transaction. During the Relevant Period, Regulation 23.203(b)(2), 17 C.F.R. 

§ 23.203(b)(2) (2017), specified that such recordings must be kept for a period of one year. 

Goldman, due to a recording failure, did not make and keep required recordings of the phone 

calls of traders and sales personnel in one of its offices that contained the oral communications 

that led to the execution of swaps and related cash and forward transactions during the Relevant 

Period. These failures violated Regulations 23.202(a)(l) and (b)(l) and 23.203(b)(2). 

IV. FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that, during the Relevant Period, 

Goldman Sachs & Co. LLC violated Regulations 23.202(a)(l), (b)(l), and 23.203(b)(2), 17 

C.F.R. §§ 23.202(a)(l), (b)(l) (2018), 23.203(b)(2) (2017). 

3 Although Goldman was unable to produce a significant number of the requested recordings, Goldman was able to 

produce recordings of certain calls made or received by traders in the affected office during this twenty-calendar-day 

period to or from other recorded phone lines in Goldman's other offices. Goldman was also able to produce the 

metadata associated with all calls made by the relevant traders, as the recording failure did not affect call metadata. 

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V. OFFER OF SETTLEMENT 

Respondent has submitted the Offer in which it, without admitting or denying the 

findings and conclusions herein: 

A. Acknowledges service of this Order; 

B. Admits the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

C. Waives: 

1. 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 it 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 Regulations, 1 7 C.F .R. 

pt. 148 (2018), relating to, or arising from, this proceeding; 

7. Any and all claims that it may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II,§§ 201-53, 110 

Stat. 847, 857-74 (codified as amended at 28 U.S.C. § 2412 and in scattered 

sections of 5 U.S.C. and 15 U.S.C.), 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, including this Order; 

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

findings contained in this Order to which Respondent has consented in the Offer; 

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

1. Makes findings by the Commission that Respondent violated Regulations 

23.202(a)(l), (b)(l), and 23.203(b)(2), 17 C.F.R. §§ 23.202(a)(l), (b)(l) (2018), 

23.203(b)(2) (2017); 

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2. Orders Respondent to cease and desist from violating Regulations 23.202(a)(l), 

(b)(l), and Regulation l .3 l(b)(2), 17 C.F.R. § l .3 l(b)(2) (2018); 

3. Orders Respondent to pay a civil monetary penalty in the amount of one million 

dollars ($1,000,000), plus post-judgment interest; 

4. Orders Respondent and its successors and assigns to comply with the conditions 

and undertakings consented to in the Offer and as set forth in Part VI of this Order. 

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

VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. Respondent shall cease and desist from violating Regulations 23.202(a)(l), (b)(l), and 

1.31(b)(2), 17 C.F.R. §§ 23.202(a)(l), (b)(l), 1.3l(b)(2) (2018). 

B. Respondent shall pay a civil monetary penalty in the amount of one million dollars 

($1,000,000) ("CMP Obligation"). If the CMP Obligation is not paid immediately, then 

post-judgment interest shall accrue on the CMP Obligation beginning on the date of entry 

of this Order and shall be determined by using the Treasury Bill rate prevailing on the 

date of entry of this Order pursuant to 28 U.S.C. § 1961 (2012). 

Respondent shall pay the CMP Obligation and any post-judgment interest by electronic 

funds transfer, U.S. postal money order, certified check, 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: 

MMAC/ESC/AMK326 

Commodity Futures Trading Commission 

Division of Enforcement 

6500 S. MacArthur Blvd. 

Oklahoma City, OK 73169 

( 405) 954-6569 office 

(405) 954-1620 fax 

9-AMC-AR-CFTC@faa.gov 

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

Thorne or her successor at the above address to receive payment instructions and shall 

fully comply with those instructions. Respondent shall accompany payment of the CMP 

Obligation with a cover letter that identifies the paying Respondent and the name and 

docket number of this proceeding. The paying Respondent 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. 

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C. Respondent and its successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer: 

1. Public Statements: Respondent agrees that neither it nor any of its successors and 

assigns, agents, or employees under its 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 Respondent's: (i) testimonial obligations; or (ii) right to take legal 

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

Respondent and its successors and assigns shall comply with this agreement, and 

shall undertake all steps necessary to ensure that all of its agents and/or 

employees under its authority or control understand and comply with this 

agreement. 

2. Partial Satisfaction: Respondent understands and agrees that any acceptance by 

the Commission of any partial payment of Respondent's CMP Obligation shall 

not be deemed a waiver of its 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. 

3. Change of Address/Phone: Until such time as Respondent satisfies in full its 

CMP Obligation as set forth in this Order, Respondent shall provide written 

notice to the Commission by certified mail of any change to its telephone number 

and mailing address within ten ( 10) calendar days of the change. 

The provisions of this Order shall be effective as of this date. 

By the Commission. 

~(l L5μJJ1!: Christoper J. Wlrkpatrick 

Secretary of the Commission 

Commodity Futures Trading Commission 

Dated: November 26, 2019 

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