The Financial Industry Regulatory Authority announced that it has fined Goldman, Sachs & Co. US$650,000 for failing to disclose that two of its registered reps had received formal notices from the U.S. Securities and Exchange Commission that they were being investigated.

Firms are required to update a representative’s regulatory record by reporting the receipt of a Wells Notice within 30 days, which FINRA says did not happen in this case.

As a result, FINRA found that Goldman did not have adequate supervisory procedures and systems in place to ensure that required disclosures were made when registered employees received notice that they were the subject of a regulatory investigation. It also found that Goldman’s written supervisory procedures, manuals and policies were inadequate.

“Goldman’s failures impacted the ability of FINRA and other securities regulators to discharge their registration, examination and oversight duties, and limited the ability of investors and other market participants to adequately assess the individuals through FINRA’s public disclosure program, BrokerCheck,” said James Shorris, FINRA executive vice president and acting chief of enforcement.

As part of the settlement, Goldman also agreed to review its supervisory procedures and systems in the reporting area and to implement and document any necessary remedial measures. In concluding this settlement, Goldman neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

IE