National investment loss lawyers KlaymanToskes is investigating Goldman Sachs & Co. after the Financial Industry Regulatory Authority (“FINRA”) censured and fined the firm $425,000 for failing to report, or inaccurately reporting, OTC options positions in approximately 1,035,000 instances. The firm also failed to supervise options trading and violated FINRA Rule 2360.
Goldman Sachs was previously hit with an options-related regulatory action by FINRA in 2017, when the firm was fined $2.5 million for OTC options-related reporting failures. In related news, the firm was fined $3 million by FINRA in April 2023 for mismarking 60 million short sell orders as related supervision failures.
Investors that suffered losses at Goldman Sachs should contact attorney Lawrence L. Klayman, Esq., at 888-997-9956, or lawrence@klaymantoskes.com for a free consultation to learn about recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
KlaymanToskes reports Goldman Sachs & Co. has entered into a regulatory action known as a Letter of Acceptance, Waiver, and Consent (“AWC”) with FINRA’s Department of Enforcement, whereby the firm consented to sanctions of a censure and $425,000 fine related to over-the-counter (OTC) options positions failures.
FINRA found that from 2018 to 2021, Goldman Sachs failed to report or inaccurately reported OTC options positions to the large options positions reporting (“LOPR”) system. According to the AWC, the firm’s systems for reporting OTC options positions to the LOPR allegedly “failed to recognize that the accounts of certain customers were under common control or acting in concert.”
As a result, FINRA found that “Goldman failed to report approximately 9,000 OTC options positions to the LOPR in approximately 35,000 instances and misreported positions by failing to identify accounts acting in concert with an In Concert ID for approximately 32,000 OTC options positions in approximately 1,000,000 instances.”
In addition, the firm failed to maintain and enforce a supervisory system reasonably designed to achieve compliance with FINRA Rule 2360 (Options). FINRA found that while the firm’s system for LOPR reporting included both an automated and a manual component, “the firm failed to conduct the manual review for institutional investors accounts as a result of an oversight during a transfer of LOPR reporting responsibilities from one department to another within the firm in July 2018.”
FINRA Rule 2360(b)(5) requires member firms to report to the LOPR “each customer or firm account that, acting alone or in concert, has established an aggregate position of 200 or more option contracts on the same side of the market covering the same underlying security or index.”
FINRA uses LOPR information to identify holders of large options positions and “to surveil for potentially manipulative behavior, including attempts to corner the market in the underlying equity, leverage an option position to affect the price, or move the underlying equity to change the value of a large option position.”
According to the regulator, “The accuracy of LOPR reporting is essential to FINRA’s surveillance. It is particularly important with respect to the OTC options market because there is no independent source of data for regulators to review OTC options.”
KlaymanToskes can help you determine if your investment loss is due to the misconduct and/or securities violations of your broker/brokerage firm. Contact Lawrence L. Klayman, Esq. for a free, confidential consultation at 888-997-9956 or lawrence@klaymantoskes.com.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lawrence@klaymantoskes.com
www.klaymantoskes.com