Goldman Sachs Reveals Currency Trading Probe

Goldman Sachs Reveals Currency Trading Probe

Goldman Sachs Group Inc (NYSE:GS) has revealed in a regulatory filing that it is under investigation for its currency trading. That’s according to reports from CNBC, Bloomberg and other media outlets.

Goldman Sachs Reveals Currency Trading Probe

Goldman Sachs probe is broad

According to the filing, regulators are investigating whether the investment firm manipulated foreign exchange rates. Goldman Sachs Group Inc (NYSE:GS) also said regulators are investigating a number of its financial products and other related activities. They are also investigating Goldman Sachs’ options trading and technology systems and controls.

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Goldman Sachs said in its regulatory filing that it is cooperating with investigators. The U.K.’s Financial Conduct Authority is leading the investigation, which is being conducted by a group of regulators from various parts of the world.

Regulators probe numerous banks

Of course Goldman Sachs isn’t the only one being investigated by regulators for these things. At least eight other firms, including JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc (NYSE:C) are also under investigation in connection with their foreign exchange rates. Several banks have suspended some of their currency traders pending the results of the investigation, although no one has officially been accused of any wrongdoing.

The Federal Reserve is one of the regulating agencies looking into the activities of banks. Specifically, the U.S. agency is looking into regulatory and legal exemptions which allowed Goldman Sachs Group Inc (NYSE:GS) and other banks to own or trade raw materials like coal, oil and metals.

Goldman Sachs to see legal losses

Today Goldman Sachs also revealed that legal losses probably rose to $4 billion during the third quarter of the year. That amount estimates how much the firm’s legal costs could go over its reserves. That would be an increase from $3.5 billion in the second quarter, but it is still less than the legal losses seen by other banks, including JPMorgan Chase & Co. (NYSE:JPM)’s $5.7 billion in losses and Bank of America Corp (NYSE:BAC)’s $5.1 billion in legal losses.

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