UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

In the Matter of: 

Goldman Sachs & Co. LLC, 

Respondent. 

) 

) 

)

) 

) 

) 

) 

) 

) 

) 

CFTC Docket No. 23-39

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 at least March 2020 to November 2020 (“Relevant Period”), Goldman Sachs & Co. LLC 

(“Goldman” or “Respondent”) violated, as set forth below, Section 4s(f)(1)(C) of the Commodity 

Exchange Act (“Act”), 7 U.S.C. § 6s(f)(1)(C), and Commission Regulations (“Regulations”) 

1.31(b)(2) and 23.202(a)(1) and (b)(1), 17 C.F.R. §§ 1.31(b)(2), 23.202(a)(1), (b)(1) (2022), and 

also violated the cease-and-desist provision of a prior Commission order. 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 of law 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 
2 

II. FINDINGS

The Commission finds the following: 

A. SUMMARY

The Act and Regulations impose recordkeeping requirements on Commission registrants

to ensure that they responsibly discharge their crucial role in our markets. Compliance with 

these requirements is essential to the Commission’s efforts to promote the integrity, resilience, 

and vibrancy of the U.S. derivatives markets through sound regulation. During the Relevant 

Period, Goldman used recording systems from two vendors to record certain phone calls. Due to 

failures in those systems, Goldman—in its capacity as a swap dealer—failed to make and retain 

thousands of audio files during the Relevant Period. In doing so, Goldman also violated an order 

that the Commission had previously issued on November 26, 2019, which, among other things, 

ordered Goldman to cease and desist from violating Regulations 1.31(b)(2) and 23.202(a)(1) and 

(b)(1), 17 C.F.R. §§ 1.31(b)(2), 23.202(a)(1), (b)(1) (2018). 

In accepting Goldman’s Offer, the Commission recognizes the cooperation of Goldman 

with the Division of Enforcement’s (“Division”) investigation of this matter. The Commission 

also acknowledges Goldman’s representations concerning its remediation in connection with this 

matter. 

B. RESPONDENT

Goldman Sachs & Co. LLC is a limited liability company with its main office in New

York, New York. It is registered with the Commission as a futures commission merchant, 

commodity trading advisor, and commodity pool operator, and has been provisionally registered 

with the Commission as a swap dealer since December 31, 2012. 

C. FACTS

1. The November 26, 2019 Order

During a previous investigation, the Division requested that Goldman produce certain 

audio recordings on dates in January 2014—recordings that 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. 

On November 26, 2019, the Commission entered an order against Goldman settling 

charges that, from January 2014 to February 2014, Goldman failed to discharge its 

recordkeeping obligations as a swap dealer under Part 23 of the Regulations, 17 C.F.R. pt. 23, 

and in particular its obligations to make and keep recordings of certain oral communications. In 

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.
3 

re Goldman Sachs & Co. LLC, CFTC No. 20-10, 2019 WL 8014251 (Nov. 26, 2019) (consent 

order) (“2019 Order”). The 2019 Order imposed a civil monetary penalty of one million dollars 

($1,000,000) and required Goldman to cease and desist from violating Regulations 23.202(a)(1) 

and (b)(1), as well as Regulation 1.31(b)(2). See id. at *4. 

2. Goldman’s Additional Recordkeeping Failures During the Relevant Period 

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

Regulations, 17 C.F.R. pt. 23 (2022), 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 1.31(b)(2) and 23.202(a)(1) and (b)(1), 17 C.F.R. 

§§ 1.31(b)(2), 23.202(a)(1), (b)(1) (2022), Goldman records the phone calls of individuals who 

may be expected to engage in such communications. This includes recording phone calls made 

on mobile devices. 

Since February 2018, Goldman has recorded calls made on mobile devices by using the 

services of a vendor. The vendor’s service worked by allowing calls made on a mobile device to 

be recorded using the same recording hardware that Goldman used for recording calls made in its 

offices. 

The version of the vendor’s system that Goldman used relied on recording architecture 

which compromised the ability of the vendor’s system to reliably record mobile audio. While 

there were audio recording failures prior to March 2020, there was an increase in audio failures 

starting in March 2020 as a result of increased use of the vendor’s recording infrastructure during 

the pandemic.2

 From at least March 2020 to September 2020, the vendor’s service failed to fully 

record certain Goldman mobile phone calls. This recording failure affected mobile calls on a 

random basis. A sample analysis done by Goldman indicated that the recording failures 

impacted approximately 2.2% of mobile phone calls from March 2020 to September 2020. 

Because Goldman had used the vendor’s services with the same recording architecture prior to 

the spring of 2020, it is possible that the flaw in the vendor’s architecture led to the same failure 

to record calls prior to that period. During the Relevant Period, Goldman failed to make and 

retain thousands of audio files because of this recording architecture failure. 

 Goldman discovered there was a recording issue in March 2020 when investigating 

reports from employees that call quality was poor when using the vendor’s system. After 

discovering there was an issue, Goldman worked to understand the cause and scope of the issue, 

and once it understood the issue, Goldman sought to remediate the issue by, among other things, 

working with the vendor to reconfigure the unreliable system architecture. An initial, interim fix 

of the system was completed in May 2020, and the vendor hardware was replaced with an 

alternative system in September 2020. 

 

2

 During the month of March 2020, Goldman’s daily mobile-device call volume increased substantially. 
4 

Although Goldman became aware there was an issue with recordings in March 2020, 

Goldman did not create any alternative written records of the phone calls which were required to 

be, but which were not in fact, recorded. 

Separate and apart from the above failure to record mobile audio communications, in 

March 2020, Goldman also began using software from another vendor that was designed to 

replicate the experience of a hard-wired trading turret—a specialized phone setup used to 

facilitate trading—via a computer, sometimes referred to as a “soft turret.” The soft turret 

allowed Goldman employees to make both handset and speaker calls via their computer. 

Goldman began using this vendor software application in March 2020. In late May 2020, 

Goldman discovered an issue where the system sometimes failed to properly record audio due to 

a software issue. Goldman implemented an interim fix of sending an alert to users when the 

issue occurred, which asked the users to log off and back on to the recording application. 

Goldman devised a way to run the interim fix automatically, instead of manually, as of 

November 2020, and implemented a permanent fix, in the form of a software update, by the end 

of June 2022. 

A sample analysis done by Goldman indicated that approximately 2% of handset calls 

using the soft turret system were not retained during the Relevant Period, meaning that there 

were approximately 1,700 handset calls that were not recorded. Calls placed using the vendor’s 

soft turret speaker functionality were similarly affected by the software issue and number in the 

thousands. 

Goldman provided assistance in the Division’s investigation. In particular, after 

Goldman became aware of the investigation, Goldman conducted impact analyses for both of the 

vendor issues discussed above and voluntarily shared the results of those analyses with Division 

staff. 

III. LEGAL DISCUSSION 

A. Violation of Cease-and-Desist Provision of Prior Commission Order 

On November 26, 2019, the Commission issued the 2019 Order filing and settling 

charges against Goldman for failing to maintain audio records. Section VI.A of the 2019 Order 

required Goldman to cease and desist from further violating Regulations 1.31(b)(2) and 

23.202(a)(1) and (b)(1), 17 C.F.R. §§ 1.31(b)(2), 23.202(a)(1), (b)(1) (2018). The Commission 
5 

has authority to bring an action for a violation of the 2019 Order pursuant to Section 6(c)(4) of 

the Act, 7 U.S.C. § 9(4). 

As discussed above, following the entry of the 2019 Order, Goldman violated 

Regulations 1.31(b)(2) and 23.202(a)(1) and (b)(1) as described herein. Thus, Goldman violated 

the 2019 Order. 

B. Violation of Recordkeeping Section 4s(f)(1)(C) of the Act and Regulations 

1.31(b)(2) and 23.202(a)(1) and (b)(1) 

Section 4s(f)(1)(C) of the Act obligates swap dealers to keep “books and records of all 

activities related to its business as a swap dealer . . . in such form and manner and for such period 

as may be prescribed by the Commission by rule or regulation” and those books and records 

must be kept “open to inspection and examination by any representative of the Commission.” 

7 U.S.C. § 6s(f)(1)(C). These statutes are implemented, among other places, at Regulations 

1.31(b)(2) and 23.202(a)(1) and (b)(1). 

 Regulations 23.202(a)(1) and (b)(1) require, 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)(1), 17 C.F.R. § 23.203(b)(1) (2022), specified that such recordings 

must be kept in accordance with Regulation 1.31(b)(2), which specified that such recordings must be 

kept for a period of one year. Goldman, due to flaws in its recording systems, did not make and 

keep required recordings of the phone calls of traders and sales personnel 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 Section 4s(f)(1)(C) of the Act and 

Regulations 1.31(b)(2) and 23.202(a)(1) and (b)(1). 

IV. FINDINGS OF VIOLATIONS 

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

violated Section 4s(f)(1)(C) of the Act, 7 U.S.C. § 6s(f)(1)(C), and Regulations 1.31(b)(2) and 

23.202(a)(1) and (b)(1), 17 C.F.R. §§ 1.31(b)(2), 23.202(a)(1), (b)(1) (2022). 

V. OFFER OF SETTLEMENT 

Respondent has submitted the Offer in which it: 

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: 
6 

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 they may possess under the Equal Access to Justice Act,

5 U.S.C. § 504, and 28 U.S.C. § 2412, and/or the rules promulgated by the

Commission in conformity therewith, Part 148 of the Regulations, 17 C.F.R.

pt. 148 (2022), 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, tit. II, §§ 201–253,

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;

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; and

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 Goldman violated Section 4s(f)(1)(C) of

the Act, 7 U.S.C. § 6s(f)(1)(C), and Regulations 1.31(b)(2) and 23.202(a)(1) and

(b)(1), 17 C.F.R. §§ 1.31(b)(2), 23.202(a)(1), (b)(1) (2022), and also violated the

cease-and-desist provision of a prior Commission order;

2. Orders Respondent to cease and desist from violating Section 4s(f)(1)(C) of the

Act, and Regulations 1.31(b)(2) and 23.202(a)(1) and (b)(1);

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

five hundred thousand dollars ($5,500,000), plus post-judgment interest within ten

days of the date of entry of this Order;

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;

and

Upon consideration, the Commission has determined to accept the Offer. 
7 

VI. ORDER

Accordingly, IT IS HEREBY ORDERED THAT: 

A. Respondent and its successors and assigns shall cease and desist from violating Section

4s(f)(1)(C) of the Act, 7 U.S.C. § 6s(f)(1)(C), and Regulations 1.31(b)(2), 23.202(a)(1)

and (b)(1), 17 C.F.R. §§ 1.31(b)(2), 23.202(a)(1), (b)(1) (2022);

B. Respondent shall pay a civil monetary penalty in the amount of five million five hundred

thousand dollars ($5,500,000) (“CMP Obligation”), within ten days of the date of the

entry of this Order. If the CMP Obligation is not paid in full within fourteen 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 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.

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 

6500 S. MacArthur Blvd. 

Room 266 

Oklahoma City, OK 73169 

9-AMZ-AR-CFTC@faa.gov

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

King 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; and 

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: (1) testimonial obligations; or (2) 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. Cooperation, in General: Respondent shall cooperate fully and expeditiously with the 

Commission, including the Commission's Division of Enforcement, in this action, 

and in any current or future Commission investigation or action related thereto. 

Respondent shall also cooperate in any investigation, civil litigation, or administrative 

matter related to, or arising from, the subject matter of this action. 

3. 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. 

4. 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 numbers and mailing 

address within ten calendar days of the change. 

5. Until such time as Respondent satisfies in full its CMP Obligation, upon the 

commencement by or against Respondent of insolvency, receivership or bankruptcy 

proceedings or any other proceedings for the settlement of Respondent's debts, all 

notices to creditors required to be furnished to the Commission under Title 11 of the 

United States Code or other applicable law with respect to such insolvency, 

receivership bankruptcy or other proceedings, shall be sent to the address below: 

Secretary of the Commission 

Office of the General Counsel 

Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21st Street N.W. 

Washington, DC 20581 

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

By the Commission. 

~l,.~-

Christopher J. Kirkpatrick 

Secretary of the Commission 

Commodity Futures Trading Commission 

Dated: August 29, 2023 

8