On October 22, 2020 NYDFS sanctioned Goldman Sachs $150 million as part of a Consent Order. It is part of global resolution with DOJ, Federal Reserve & others concerning highly-publicized FCPA scheme involving proceeds of bonds sold by its international arm. Some takeaways from the DFS findings:
– NYDFS continues focus on the impact of enterprise-wide compliance failures on its NY regulated entity, particularly with shared-service models.
– Banking regulators have for decades treated the “safety and soundness” definition broadly. This also continues.
– “GS Group is primarily responsible for the design, implementation, and execution of an enterprise-wide compliance program for GS Group as well as its subsidiaries,” including NYDFS licensee Goldman Sachs Bank USA.
– “The seamless transfer of information between the central compliance function and subsidiaries is particularly crucial where a subsidiary has its own separate regulatory obligations to report certain compliance concerns to regulators.”
– DFS says Goldman’s failure to investigate, address and report a number of red flags resulted in unsafe and unsound conduct at GSBUSA and the inability by NYDFS to share information that would have been of interest to other NYDFS licensees, including bond purchasers.
The Consent Order may be found here: https://www.dfs.ny.gov/system/files/documents/2020/10/ea20201021_goldman_sachs.pdf