UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

)

In the Matter of: ) 

) 

Goldman Sachs & Co. LLC, ) 

) CFTC Docket No. 23-59

Respondent. ) 

)

)

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 

since becoming a provisionally registered swap dealer on December 31, 2012 until at least the 

present (the “Relevant Period”), Goldman Sachs & Co. LLC (“Goldman” or “Respondent”) 

violated Sections 2(a)(13)(F) and (G) and 4s(h)(1) of the Commodity Exchange Act (“Act”), 7 

U.S.C. §§ 2(a)(13)(F), (G), 6s(h)(1), and Regulations 23.431(a)(3)(i), 23.602(a), 43.3(a)(1), 

45.3(b)(1), 45.4(c), 45.6, 17 C.F.R. §§ 23.431(a)(3)(i), 23.602(a), 43.3(a)(1), 45.3(b)(1), 45.4(c), 

45.6 (2022) of the Commission Regulations (“Regulations”) promulgated thereunder.1

 

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 

1

 The Commission amended Parts 43, 45, and 49 on November 25, 2020, with the new regulations becoming 

effective on January 25, 2021. See Swap Data Recordkeeping and Reporting Requirements, 85 Fed. Reg. 75503 

(Nov. 25, 2020); Real-Time Public Reporting Requirements, 85 Fed. Reg. 75422 (Nov. 25, 2020); Certain Swap 

Data Repository and Data Reporting Requirements, 85 Fed. Reg. 75601 (Nov. 25, 2020). The amendments did not 

affect the substantive requirements at issue in this order. 
 2 

Exchange Act, Making Findings, and Imposing Remedial Sanctions (“Order”), and 

acknowledges service of this Order.2

II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

The Act and Regulations impose supervision 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. 

The Division of Enforcement’s (“Division”) investigation revealed that, since becoming a 

swap dealer, Goldman has failed to properly resource and prioritize CFTC compliance. This 

failure resulted in violations that permeated numerous aspects of Goldman’s swap dealer 

activities. As a result, Goldman failed to diligently supervise a wide range of its swap dealer 

activities in violation of Section 4s(h)(1) of the Act and Regulation 23.602(a). The Division’s 

investigation revealed supervisory deficiencies in a number of areas: swap data reporting, pretrade mid-market mark disclosures, a personnel reporting line, clearing member risk 

management policy, notices regarding its initial margin model and segregation, and disclosure of 

static material economic terms. These deficiencies were pervasive, and in some instances, have 

persisted since 2013. The Commission has not brought a swap data reporting case or a pre-trade 

mid-market marks (“PTMMMs”) case with this volume of failures, and thus those failures are 

also the basis for standalone violations of the Act and Regulations.3

 

Since the swap data reporting requirements went into effect, Goldman has failed to 

accurately and timely report a significant portion of its swap data to a swap data repository 

(“SDR”), as required by CFTC Regulations. While Goldman has backreported more than 20 

million swaps to date, the Commission has reason to believe that this figure significantly 

underestimates the true scope of the swap data4 reporting failures at Goldman. As a result, 

Goldman has violated Section 2(a)(13)(F) and (G) of the Act and Regulations 43.3(a)(1), 

45.3(b)(1), 45.4(c), and 45.6. 

 

2

 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 

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

 Some of these failures were the subject of a separate action brought by the National Futures Association (“NFA”). 4

 The Part 43 required data elements are defined as “swap transaction and pricing data” and the related Part 45 term 

is “swap data.” For purposes of this Order, references to “swap data” are intended to include both swap transaction 

and pricing data and swap data. 
 3 

In addition, on more than one million occasions since 2013, Goldman provided 

counterparties with PTMMMs that were inaccurate or failed to provide a PTMMM entirely. 

This conduct violated Section 4s(h)(1) of the Act, 7 U.S.C. § 6s(h)(1), and Regulation 

23.431(a)(3)(i), 17 C.F.R. § 23.431(a)(3)(i) (2022). 

In accepting Goldman’s Offer, the Commission recognizes the substantial 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. The Commission’s recognition of Goldman’s substantial 

cooperation and appropriate remediation is further reflected in the form of a reduced penalty. 

B. RESPONDENT 

Goldman Sachs & Co. LLC is a limited liability company, with its principal place of 

business in New York, New York. Goldman was provisionally registered as a swap dealer from 

December 31, 2012 to August 15, 2023, and has been registered as a swap dealer since August 

15, 2023.

C. FACTS 

Since becoming a provisionally registered swap dealer, Goldman failed to diligently 

supervise swap data reporting, PTMMM disclosures, a personnel reporting line, clearing member 

risk management, notices regarding its initial margin model and segregation, and disclosure of 

static material economic terms, as described below. The failures regarding swap data reporting 

and PTMMM disclosures were extensive in volume and scope. Overall, the Division’s 

investigation exposed that these numerous supervision deficiencies at Goldman persisted, in 

some instances, for many years. 

1. Goldman Failed to Diligently Supervise Numerous Aspects of its Swap Dealer 

Business 

a. Supervisory Failures Regarding Swaps Data Reporting 

Since becoming a provisionally registered swap dealer, Goldman experienced a myriad of 

swap data reporting problems. Many of Goldman’s swap data reporting failures persisted over 

the course of many years, and impacted all asset classes and numerous fields for more than 20 

million swaps, as discussed in further detail below. 

Many, but not all, of the issues were self-identified and disclosed by Goldman in its 

annual chief compliance officer reports (“CCO Reports”) dating back to 2013. While Goldman 

routinely included material issues of noncompliance regarding swap data reporting in its CCO 

Reports, for more than six years, Goldman failed to take steps needed to ensure its compliance 

with swap reporting rules was adequate. And notably, in its 2018 CCO Report, Goldman 

expressed its intention to change certain swap data processes but only after the applicable 

Regulations were amended and SDR architecture was completed. 
 4 

As discussed further below, during the course of its investigation the Division discovered 

additional supervisory failures with regard to swap data reporting that went undetected by 

Goldman. 

The duration, scope, and volume of these failures demonstrate Goldman’s failure to 

sufficiently supervise its swap data reporting, and also merit standalone swap data reporting 

charges. 

b. Supervisory Failures Regarding PTMMM Disclosures 

Goldman also experienced significant failures with regard to its PTMMM disclosure 

practices. Goldman failed to implement its policies and procedures with respect to PTMMM 

disclosures in a variety of transaction types, which resulted in Goldman providing counterparties 

with PTMMMs that were inaccurate, or failing to provide a PTMMM entirely, on more than one 

million occasions. Goldman failed to identify these issues, in some instances for more than nine 

years. In addition, Goldman failed to adhere to policies and procedures requiring its traders and 

salespeople to provide PTMMMs to potential counterparties for voice trades. 

While Goldman identified some of these PTMMM supervisory failures independently, 

others were discovered by Goldman in response to inquiries from the Division throughout the 

course of its investigation and in response to examinations conducted by the National Futures 

Association (“NFA”). 

The duration, scope, and volume of these PTMMM failures demonstrate that Goldman 

failed to adequately supervise its PTMMM disclosure practices, and also merit standalone 

PTMMM disclosure charges. 

c. Supervisory Failures Regarding a Personnel Reporting Line, Clearing 

Member Risk Management, Notices Regarding Its Initial Margin 

Model and Segregation, and Disclosure of Static Material Economic 

Terms 

The Division’s investigation revealed additional supervisory deficiencies regarding a 

personnel reporting line, clearing member risk management, notices regarding its initial margin 

model and segregation, and disclosure of static material economic terms. Many of these issues 

persisted for a significant amount of time because either (1) Goldman failed to have a sufficient 

policy and procedure in place to prevent the issue or (2) Goldman failed in a timely manner to 

identify instances in which policies and procedures were not followed. In particular: 

 The head of Global Clearing reported to the head of Business Trading at Goldman for 

more than eighteen months; 

 Goldman is a clearing member and did not have a clearing member risk management 

policy in place; 

 Within its existing policies, Goldman failed to have a procedure in place to notify the 

Commission and NFA when making certain changes to its internal pricing models 

that have a material impact on its standard initial margin model; 
 5 

 Goldman failed to provide the required notice to clients who elected not to have their 

funds segregated for more than two years; and 

 Goldman’s static material economic terms template included stale and/or missing 

information. 

2. Goldman Failed to Report Accurate and Timely Swap Data 

Reporting is at the heart of the Commission’s market and financial surveillance 

programs, which are critical to the Commission’s mission to protect market participants and 

promote market integrity, and helps it to fulfill its Congressional mandate of monitoring systemic 

risk. Accurate swap data is essential to effective fulfillment of the regulatory functions of the 

Commission, including meaningful surveillance and enforcement programs. 

As a registered swap dealer, Goldman is a reporting counterparty and thus is required to 

report certain data about swap transactions to an SDR. Since provisionally registering, Goldman 

inaccurately reported swap data, failed to report swap data, reported swaps that should not have 

been reported, or reported swap data outside of the time requirements prescribed by Part 43 and 

Part 45 of the Regulations. These errors impacted all asset classes and spanned numerous 

required data fields for a significant number of swaps. 

For example, Goldman identified that from at least December 2014 through June 2020, 

its reporting system (1) inaccurately reported more than 18 million swaps; (2) failed to report 

approximately 286,000 swaps; (3) reported more than 169,000 swaps that should not have been 

reported; and (4) reported more than 1.8 million swaps outside of the time requirements 

prescribed by the Regulations. Goldman has advised the Division that it backreported more than 

20 million swaps to address these failures. 

However, aside from that backreporting, the Division’s investigation revealed that 

Goldman’s remediation of its swap data reporting problems was incomplete. In addition to the 

errors identified by Goldman from December 2014 through June 2020, the Division identified a 

significant volume of other errors scattered across asset classes and fields from July 2020 

through 2022. For example, the Division discovered that from July 2020 through November 

2021 alone, Goldman failed to report tens of thousands of valid legal entity identifiers (“LEIs”), 

as required by the Regulations. 

In addition, the Division identified that on just one representative day in 2022, a 

significant majority of Goldman’s reported trades contained at least one error. 

In light of the additional errors identified by the Division, Goldman’s swap data errors 

impacted more than the 20 million swaps identified by Goldman. Consequently, Goldman’s 

reporting failures impeded the Commission’s ability to properly oversee the swap markets and 

often caused inaccuracies in publicly-disseminated information. Goldman represents that some 

of the issues causing the errors have been remediated, while others remain ongoing. 

3. Goldman Failed to Disclose PTMMMs 

Registered swap dealers, such as Goldman, must comply with certain external business 

conduct standards. One standard requires swap dealers to disclose to potential counterparties the 
 6 

mid-market mark of a swap before entering a swap. This PTMMM must exclude any amounts 

for profit, credit reserve, hedging, funding, liquidity, or any other costs or adjustments. By 

making such disclosures, swap dealers inform their counterparties of an approximate measure of 

the objective value of a swap prior to adding the swap dealer’s markup. 

On more than one million occasions since 2013, Goldman provided counterparties with 

PTMMMs that were inaccurate or failed to provide a PTMMM entirely. These failures were 

caused by numerous distinct issues that impacted a variety of products. 

For example, while testing an update to its client-facing platform for FX forwards and 

non-deliverable forwards, Goldman discovered that it had been relaying a PTMMM that 

reflected Goldman’s preference to either be a seller or a buyer based on its inventory risk, rather 

than calculating the PTMMM as required by the Regulations. Goldman represents that from 

December 2018 until February 2022, this error impacted approximately (a) 185,000 FX forwards 

and non-deliverable forwards, (b) 825,000 FX multi-leg forwards and FX swaps, (c) 3,600 credit 

index swaps, and (d) 3,100 equity index swaps. 

In addition, in 2020, Goldman discovered that when traders manually adjusted the bid/ask 

spread for FX options, in certain instances, Goldman’s internal system automatically adjusted the 

PTMMM in the same direction. In those instances, an inaccurate PTMMM was conveyed to the 

counterparty as a result of the manual adjustment. Goldman estimates that this failure impacted 

approximately 70,000 FX options between 2013 and 2020. 

Separately, in certain instances, Goldman failed to provide PTMMMs or provided 

inaccurate PTMMMs for voice trades, including instances where a now-former salesperson 

provided inaccurate PTMMMs to counterparties in violation of Goldman’s policies and 

procedures. 

Goldman represents that it has since taken remedial measures with regard to each of these 

issues, including by making enhancements to systems that were providing incorrect PTMMMs, 

providing additional training for its staff, creating pre-trade booking prompts to ensure traders 

and salespeople provide PTMMMs on voice trades, terminating the salesperson identified in the 

preceding paragraph after Goldman detected his misconduct, and enhancing its quarterly testing 

of its PTMMM practices.5

 

5

 Separately, through the course of its examinations, the NFA identified numerous instances where Goldman failed 

to act in accordance with CFTC Regulations. These violations included failures to (1) collect and post variation 

margin (“VM”), (2) have written procedures reasonably designed to ensure compliance with the CFTC’s knowyour-counterparty requirements, (3) have policies and procedures reasonably designed to obtain and retain a record 

of essential facts regarding its counterparties, (4) implement policies and procedures reasonably designed to ensure 

compliance with its PTMMM obligations, (5) provide PTMMM to uncleared swap counterparties when required, (6) 

create and retain records of compliance with PTMMM obligations and the external business conduct standards, (7) 

ensure its daily trading records included all information necessary to conduct a comprehensive and accurate trade 

reconstruction for each swap, including pre-execution trade information, (8) diligently supervise certain activities 

relating to its swap dealer business, and (9) follow certain external business conduct standards policies and 

procedures. See In re Goldman Sachs & Co. LLC, NFA Case No. 22-BCC-003 (Mar. 31, 2022). While these 
 7 

4. Goldman’s Cooperation 

Goldman engaged in open and regular communication with the Division throughout the 

Division’s investigation, performed significant additional analyses of Goldman’s compliance 

programs, provided robust written responses to questions posed by the Division, and voluntarily 

disclosed new issues to the Division as they arose during the course of the investigation. 

Goldman’s cooperation materially advanced the Division’s investigation by allowing the 

Division to conserve time and substantial resources. 

III. LEGAL DISCUSSION 

A. Goldman Failed to Supervise Numerous Areas of its Swap Dealer Business in 

Violation of Section 4s(h)(1) of the Act and Regulation and 23.602(a) 

Section 4s(h)(1) of the Act requires “diligent supervision of the business of the registered 

swap dealer.” 7 U.S.C. § 6s(h)(1). Regulation 23.602(a), 17 C.F.R. § 23.602(a) (2022), 

implement the supervision requirements of Section 4s(h)(1) of the Act. 

Regulation 23.602(a) requires swap dealers to establish and maintain a system to 

supervise, and to diligently supervise, all activities relating to its business performed by its 

employees and agents, and further requires that such system shall be “reasonably designed to 

achieve compliance with the requirements of the Commodity Exchange Act and Commission 

regulations.” “The operative language of Regulation 23.602(a) is similar to the language of the 

Commission’s longstanding supervision regulation for futures and options, Regulation 166.3.” 

In re Cargill, Inc., CFTC No. 21-37, 2021 WL 4518517, *4 (Sept. 30, 2021) (consent order). 

Under Regulation 23.602, a violation is demonstrated by showing either that: (1) the 

registrant’s supervisory system was generally inadequate; or (2) the registrant failed to perform 

its supervisory duties diligently. See In re Bank of Nova Scotia, CFTC No. 20-26, 2020 WL 

4926053, at *10 (Aug. 19, 2020) (consent order) (citing In re Commerzbank AG, CFTC No. 19-

03, 2018 WL 5921385, at *10-11 (Nov. 8, 2018) (consent order)); In re INTL FCStone Mkts., 

LLC, CFTC No. 15-27, 2015 WL 4980321, at *3 (Aug. 19, 2015) (consent order) (interpreting 

Regulation 23.602 and noting its similarity to Regulation 166.3, 17 C.F.R. § 166.3, making case 

law concerning Regulation 166.3 instructive); cf. In re Murlas Commodities, Inc., CFTC No. 85-

29, 1995 WL 523563, at *9 (Sept. 1, 1995) (consent order) (interpreting Regulation 166.3). 

Either showing “alone is sufficient to establish a violation of the supervision 

requirement.” Commerzbank, 2018 WL 5921385, at *10 (interpreting Regulation 23.602 in light 

of Regulation 166.3 precedents). No evidence of an underlying violation is necessary. In re 

Collins, CFTC No. 94-13, 1997 WL 761927, at *10 (Dec. 10, 1997) (interpreting Regulation 

166.3). Evidence of violations that “‘should be detected by a diligent system of supervision, 

 

violations were the subject of an NFA case, the scope of violations cited underscores the widespread failure to 

properly resource and prioritize compliance with CFTC Regulations. 
 8 

either because of the nature of the violations or because the violations have occurred repeatedly’ 

is probative of a failure to supervise.” CFTC v. Deutsche Bank AG, No. 1:16-cv-6544 (WHP), 

2020 WL 4611985, at *8 (S.D.N.Y. June 17, 2020) (quoting INTL FCStone Mkts., 2015 WL 

4980321, at *3). 

During the Relevant Period, as set forth in Section II.C.1 of this Order, Goldman failed to 

have adequate policies and procedures in place in certain areas of its swap dealer business, and 

failed to execute its policies and procedures in other areas. These supervisory failures resulted in 

a significant amount of violations, over an extended period of time. Goldman, who is a clearing 

member firm, failed to have a policy in place specific to clearing member risk management. 

Similarly, Goldman’s existing policies failed to have a procedure in place to notify the 

Commission and the NFA when it made changes to its internal pricing models that have an 

impact on its standard initial margin model. Goldman also failed to adhere to its policies and 

procedures to instruct its traders and salespeople to provide PTMMMs to potential counterparties 

for voice trades. And while Goldman had policies and procedures in place to ensure compliance 

with the swap data reporting and other aspects of the PTMMM disclosure requirements, its 

failure to sufficiently adhere to those policies and procedures resulted in swap data reporting 

failures impacting more than 20 million swaps, and more than one million PTMMM disclosure 

failures, as described above. Goldman also failed to adhere to the policy that prohibits the head 

of Global Clearing from reporting to the head of Business Trading for more than eighteen 

months. Thus, Goldman violated Section 4s(h)(1) of the Act and Regulation 23.602(a). 

B. Goldman Failed to Accurately Report Swap Data in Violation of Section 2(a)(13)(F) 

and (G) of the Act and Regulations 43.3(a)(1), 45.3(b)(1), 45.4(c), and 45.6 

The Act states that, with regard to real-time data, “[p]arties to a swap . . . shall be 

responsible for reporting swap transaction information to the appropriate registered entity in a 

timely manner as may be prescribed by the Commission.” Section 2(a)(13)(F) of the Act, 

7 U.S.C. § 2(a)(13)(F). The Act also requires data for each swap (whether cleared6

 or uncleared) 

to be reported to a registered SDR. Section 2(a)(13)(G) of the Act, 7 U.S.C. § 2(a)(13)(G). 

Pursuant to these requirements, the Commission adopted implementing swaps data reporting 

regulations, which apply to Goldman in its capacity as a registered swap dealer. See, e.g., Parts 

43 and 45 of the Regulations, 17 C.F.R pts. 43 and 45 (2022). 

Specifically, Regulation 43.3(a)(1) states that “[a] reporting counterparty . . . shall 

report . . . publicly reportable swap transaction[s] to a[n] . . . [SDR] as soon as technologically 

practicable after execution.”7

 Regulation 43.3(a)(1),17 C.F.R. § 43.3(a)(1) (2022). 

 

6

 A “cleared swap” is defined as “any swap that is, directly or indirectly, submitted to and cleared by a derivatives 

clearing organization.” Section 1a(7) of the Act, 7 U.S.C. § 1a(7) (2018). 

7

 The phrase “as soon as technologically practicable” means “as soon as possible, taking into consideration the 

prevalence, implementation, and use of technology by comparable market participants.” Regulation 43.2, 17 C.F.R. 

§ 43.2 (2022). Moreover, in the preamble to Part 43, the Commission acknowledged that swap dealers are “more 

likely to have the infrastructure to report their swap transaction and pricing data to an SDR faster than other 

categories of market participants.” 77 Fed. Reg. 1182 (Jan. 9, 2012). 
 9 

Regulation 45.3(b)(1) sets forth the requirements for reporting creation data, including 

LEIs, among other fields. See 17 C.F.R. §§ 45.3(b)(1) (2022). 

Regulation 45.4(c)(1)(i) requires registered entities and swap counterparties to report 

continuation data for uncleared swaps, including the requirement to report life cycle event data. 

See 17 C.F.R. § 45.4(c)(1)(i) (2022). In addition, Regulation 45.4(c)(2)(i) requires registered 

entities to report end-of-day valuation data.8

 See 17 C.F.R. § 45.4(c)(2)(i) (2022). 

Regulation 45.6 requires each counterparty to a swap to “be identified in all 

recordkeeping and all swap data reporting pursuant to this part by means of a single [LEI].” 

17 C.F.R. § 45.6 (2022). 

These implementing regulations “were designed to enhance transparency, promote 

standardization, and reduce systemic risk.” In re ED&F Man Capital Mkts., Ltd., CFTC No. 22-

13, 2022 WL 827785, at *5 (Mar. 15, 2022) (consent order) (quoting In re Mizuho Capital Mkts. 

LLC, CFTC No. 21-17, 2021 WL 4501467, at *9 (Sept. 27, 2021) (consent order)). “Market 

participants rely upon the public availability of swap data for price discovery purposes.” In re 

Morgan Stanley Capital Servs. LLC, CFTC No. 20-78, 2020 WL 5876732, at *4 (Sept. 30, 2020) 

(consent order) (citations omitted). “The accuracy and completeness of swap reporting are 

critical to the Commission’s mission to protect market participants and to ensure market 

integrity.” Deutsche Bank, 2020 WL 4611985, at *8 (citing In re Société Généralé Int’l Ltd., 

2019 WL 4915485, at *6 (collecting cases)). The Commission, in turn, requires complete and 

accurate reporting data to engage in meaningful oversight of the swaps market. Id. 

During the Relevant Period, as set forth in Section II.C.2 of this Order, Respondent failed 

to report swap data in an accurate fashion resulting in tens of millions of errors, and was also 

often untimely in its reporting. As a result, Respondent violated Section 2(a)(13)(F) and (G) of 

the Act, and Regulations 43.3(a)(1), 45.3(b)(1), 45.4(c), and 45.6. See, e.g., In re BNP Paribas, 

CFTC No. 22-19, 2022 WL 2734273, at * 2 (July 5, 2022) (consent order) (millions of errors 

resulting in violations of Regulations 43.3 and 45.3); ED&F Man, 2022 WL 827785, at *5 

(hundreds of thousands of errors resulting in violations of, inter alia, Regulations 43.3(a), 43.4, 

45.3, 45.4, and 45.6); Mizuho, 2021 WL 4501467, at *9 (more than one hundred thousand errors 

resulting in violations of, inter alia, Regulations 43.3(a), 43.4, 45.3, and 45.4); Morgan Stanley, 

2020 WL 5876732, at *2, 4 (approximately three million errors resulting in violations of, inter 

alia, Regulations 43.3(a), 45.3, 45.4, and 45.6). 

C. Goldman Failed to Provide PTMMMs in Violation of Section 4s(h)(1) of the Act and 

Regulation 23.431(a)(3)(i) 

Section 4s(h)(1) of the Act requires swap dealers to comply with business conduct 

standards prescribed by the Commission. Pursuant to Section 4s(h)(1) of the Act, the 

Commission promulgated Regulation 23.431(a)(3)(i), which requires swap dealers to disclose a 

PTMMM to counterparties prior to the execution of a swap. 

 

8

 The term “valuation data” includes “the data elements necessary to report information about the daily mark of the 

transaction, pursuant to [7 U.S.C. § 6s(h)(3)(B)(iii)], and to [17 C.F.R. § 23.431] of this chapter if applicable.” 

Regulation 45.1, 17 C.F.R. § 45.1 (2022). 
 10 

Specifically, Regulation 23.431(a)(3)(i) requires swap dealers to disclose to 

counterparties “[a]t a reasonably sufficient time prior to entering into a swap,” the “material 

incentives and conflicts of interest” the swap dealer may have in connection with the swap, 

which includes “the [pre-trade] mid-market mark of the swap.” Regulation 23.431(a)(3)(i). The 

mid-market mark “shall not include amounts for profit, credit reserve, hedging, funding, 

liquidity, or any other costs or adjustments.” Regulation 23.431(d)(2), 17 C.F.R. § 23.431(d)(2) 

(2022). These disclosures must be made “at a reasonably sufficient time prior to entering into a 

swap.” Regulation 23.431(a). During the Relevant Period, as set forth in Section II.C.3 of this 

Order, on more than one million occasions, Goldman failed to meet the requirements of 

Regulation 23.431(a)(3)(i) by failing to provide an accurate PTMMM, or by failing to provide 

PTMMMs at all. 

IV. FINDINGS OF VIOLATIONS 

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

violated Sections 2(a)(13)(F) and (G), and 4s(h)(1) of the Act, 7 U.S.C. §§ 2(a)(13)(F), (G), 

6s(h)(1), and Regulations 23.431(a)(3)(i), 23.602(a), 43.3(a)(1), 45.3(b)(1), 45.4(c), 45.6, 17 

C.F.R. §§ 23.431(a)(3)(i), 23.602(a), 43.3(a)(1), 45.3(b)(1), 45.4(c), 45.6 (2022). 

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, 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; 
 11 

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, §§ 201–253, 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; 

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; 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 Respondent violated Sections 2(a)(13)(F) 

and (G), and 4s(h)(1) of the Act, 7 U.S.C. §§ 2(a)(13)(F), (G), 6s(h)(1), and 

Regulations 23.431(a)(3)(i), 23.602(a), 43.3(a)(1), 45.3(b)(1), 45.4(c), 45.6, 17 

C.F.R. §§ 23.431(a)(3)(i), 23.602(a), 43.3(a)(1), 45.3(b)(1), 45.4(c), 45.6 (2022); 

2. Orders Respondent to cease and desist from violating Sections 2(a)(13)(F) and 

(G), and 4s(h)(1) of the Act and Regulations 23.431(a)(3)(i), 23.602(a), 

43.3(a)(1), 45.3(b)(1), 45.4(c), 45.6; 

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

dollars ($30,000,000), plus post-judgment interest; and 

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. 

F. Represents that it has taken a number of remedial steps, including, but not limited to: 

1. Correcting swaps reporting errors by backreporting more than 20 million swaps, 

including both live and matured positions; 

2. Identifying and remediating the primary root causes of many of the swaps 

reporting issues identified in the Order; 

3. Assessing supervisory controls to identify and implement enhancements, 

including improved supervisory reports, to improve compliance with swap 

reporting rules; 

4. Reviewing electronic systems that provide PTMMMs and making enhancements 

to systems that were providing incorrect PTMMMs; 

5. Creating pre-booking prompts to ensure traders and salespeople provide 

PTMMMs on voice trades, providing additional training to traders and 
 12 

salespeople on PTMMM requirements, and enhancing quarterly testing of 

compliance with PTMMM rules; 

6. Reorganizing clearing reporting lines to enhance the required partition between 

the clearing unit and the business trading unit; 

7. Commencing process of updating policies and procedures to ensure they cover 

and properly document compliance with Regulation 23.609; 

8. Initiating a process to ensure Goldman’s policies contain sufficient procedures for 

notifying the Commission and NFA of changes to its internal pricing models that 

have a material impact on its standard initial margin model; 

9. Providing required notice regarding back-office procedures to unsegregated 

clients and enhancing process for providing such notices; and 

10. Correcting stale and missing terms contained in static material economic term 

templates. 

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

VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

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

2(a)(13)(F) and (G), and 4s(h)(1) of the Act, 7 U.S.C. §§ 2(a)(13)(F), (G), 6s(h)(1), and 

Regulations 23.431(a)(3)(i), 23.602(a), 43.3(a)(1), 45.3(b)(1), 45.4(c), 45.6, 17 C.F.R. §§ 

23.431(a)(3)(i), 23.602(a), 43.3(a)(1), 45.3(b)(1), 45.4(c), 45.6 (2022). 

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

($30,000,000) (“CMP Obligation”), within ten days of the date of the entry of this Order. 

If the CMP Obligation is not paid in full within ten days of the date of entry of this Order, 

then post-judgment interest shall accrue on the unpaid portion of 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 
 13 

6500 S. MacArthur Blvd. 

HQ 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. 

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

and undertakings set forth in the Offer: 

1. Consultant: Within 60 days of entry of this Order, at its own expense, Respondent 

shall retain, in consultation with and subject to the approval of the Division, a 

consultant (the “Consultant”) for a three-year term, to assist Goldman in its 

remediation. The Consultant shall advise on and assess Goldman’s 

implementation of the Remediation Plan, described below. The Consultant shall 

have sufficient knowledge of the provisions of the Act and Regulations applicable 

to swap dealers to understand, monitor, and assess the policies, procedures, and 

practices of Respondent. Furthermore, the Consultant must, in the view of the 

Division, be sufficiently impartial, distinct, and independent from Respondent and 

its directors, officers, employees, counsel, and other representatives. 

2. Remediation Plan: The Consultant shall assist Goldman in developing a written 

remediation plan that will describe the specific steps and timelines necessary for 

Goldman to fully address the specific items of noncompliance identified in 

Section II.C.1-3 of this Order, concerning swap data reporting; disclosure of 

PTMMMs; and supervisory failures regarding swap data reporting, disclosure of 

PTMMMs, a personnel reporting line, clearing member risk management, notices 

regarding its initial margin model and segregation, and disclosure of static 

material economic terms (“Remediation Plan”). The Remediation Plan shall be 

subject to the review and approval of the Division. 

3. Consultant’s Rights, Authority, and Responsibilities: 

a. Although the Division shall not be a party to any agreement(s) between 

the Consultant and Respondent, any agreement between the Consultant 

and Respondent must include language that the Consultant agrees to 

provide its services for the benefit of the Commission, that any and all 

reports and information provided by the Consultant to the Division shall 

be deemed the property of the Commission, and that the Consultant shall 
 14 

abide by any specific request by the Division for confidential treatment of 

any communication among the Consultant and the Division. 

b. The Consultant shall review and assess for sufficiency aspects of 

Respondent’s swap dealer compliance program included in the 

Remediation Plan. The Consultant shall also review and assess for 

sufficiency the remedial measures listed in Section V.F, as well as those 

implemented as part of the Remediation Plan. 

c. Within 180 days of retention, and every six months thereafter, the 

Consultant shall independently prepare and submit to the Division and 

Respondent a written report. Such report shall include a description of the 

Consultant’s independent and objective assessment of the status of 

Respondent’s implementation of the Remediation Plan and the 

Consultant’s ongoing independent and objective assessment of 

Respondent’s swap dealer’s compliance program related to the items of 

non-compliance identified in Section VI.C.2 of this Order. 

The Consultant’s report shall also include: (i) an analysis of Respondent’s 

ability to comply with the Remediation Plan, (ii) any recommendations 

made by the Consultant to cure Respondent’s violations as set out in this 

Order; and (iii) a description of Respondent’s implementation of any such 

recommendations. If Respondent chooses not to adopt the Consultant’s 

recommendations within a reasonable period of time, the Consultant shall 

report that fact to the Division, along with Respondent’s stated reason for 

not adopting the same. 

The Consultant’s report shall also include a description of the Consultant’s 

methodology, information relied upon, and bases for the Consultant’s 

findings. 

d. Respondent may review the Consultant’s report prior to its production to 

the Division. To the extent that Respondent disagrees with the 

Consultant’s findings or recommendations, Respondent may submit its 

objections in writing to the Division. 

e. Communications between the Consultant and Respondent are not 

protected by any privilege. The Consultant shall have the right to discuss 

the facts and circumstances of its findings with the Division, and the 

Division may disclose to the Consultant those portions of its investigation 

that may assist the Consultant in reviewing and monitoring Respondent’s 

policies and procedures in accordance with Paragraph 2(c) of these 

undertakings. The Consultant is also permitted to communicate at any 

time with the Division concerning its consultantship, review, findings, 

assessments, and reports. 
 15 

f. Respondent shall cooperate fully with the Consultant, including, but not 

limited to, providing the Consultant: 

i. timely access to all files, documents, books, records, computer 

systems, personnel, and facilities that fall within the scope of the 

responsibilities of the Consultant, subject to a legitimate claim of 

any legally recognized privilege. If timely access is not provided, 

the Consultant shall immediately notify the Division of the 

circumstances of the delay; 

ii. the right to meet independently with and interview any director, 

officer, employee, agent, or consultant of Respondent and to 

participate in any meeting concerning any matter within or relating 

to the Consultant’s duties, subject to a legitimate claim of any 

legally recognized privilege; and 

iii. the right to observe Respondent’s business operations that fall 

within the scope of the Consultant’s responsibilities, subject to a 

legitimate claim of any legally recognized privilege. 

If Respondent agrees, in its sole discretion, to provide the Consultant with 

access to privileged materials, the Consultant and the Division shall agree 

not to assert that such access constitutes a waiver of any legally 

recognized privilege and the Consultant shall further agree to maintain the 

confidentiality of the privileged materials (except to the extent that 

disclosure is required by law or may be necessary in furtherance of the 

Consultant’s discharge of its official duties and responsibilities).9

 In the 

event Respondent seeks to withhold access to privileged materials from 

the Consultant, or where the Respondent reasonably believes production 

would otherwise be inconsistent with applicable law, Respondent shall 

work cooperatively with the Consultant to resolve the matter to the 

satisfaction of the Consultant. If the matter cannot be resolved, then, at 

the request of the Consultant, Respondent shall provide written notice to 

the Consultant and the Division, including a general description of the 

nature of the information, documents, records, facilities, and/or employees 

that are being withheld, as well as the bases of the assertion(s) of 

privilege(s). 

g. At any time during the Consultant’s term, the Division may terminate the 

term of the Consultant prior to three years elapsing. After two years of the 

Consultant’s term, Respondent may also petition the Division to make 

such a termination. 

 

9

 If the Consultant believes that disclosure is necessary in furtherance of the Consultant’s discharge of its duties and 

responsibilities set forth in this Order, the Consultant shall provide Respondent reasonable notice in advance of such 

disclosure, including the basis for such disclosure, and a reasonable opportunity to oppose any such disclosure. 
 16 

h. Goldman will make all reasonable efforts to complete the Remediation 

Plan during the Consultant’s term. Upon request by Respondent or the 

Consultant, the Division shall have the discretion to extend the time 

periods set forth in Section VI.C of this Order. 

i. If new violations are identified during the Consultant’s term that are 

similar in kind to the specific items of non-compliance identified in 

Section II.C.1-3 of this Order, the Division may recommend that the 

Commission initiate an enforcement action. However, before making any 

such recommendation, the Division will consider whether Goldman has 

cooperated with the Consultant as set forth in Section VI.C.3.f of this 

Order, has accepted the recommendations made by the Consultant to cure 

such newly identified violations, and is undertaking or has undertaken 

reasonable efforts to complete the Remediation Plan. 

4. 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 and/or its agents’ and/or employees’: (a) testimonial 

obligations, or (b) 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. The parties understand and agree that, to the extent 

that the Commission brings an enforcement action against any employee or agent 

of Respondent arising from the same nexus of facts as this Order, this provision 

shall not apply to actions or public statements by such employee made in 

connection with that enforcement action. 

5. Cooperation, in General: Respondent shall cooperate fully and expeditiously with 

the Commission, including the Commission’s Division of Enforcement and any 

other governmental agency or any self-regulatory organization, 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. 

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

the Commission of any partial payment of Respondent’s Restitution Obligation, 

Disgorgement Obligation, or 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. 

7. 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