Goldman Sachs has agreed to pay a $120 million penalty after government regulators found its traders worked to rig a key benchmark rate to profit the firm.
The Commodity Futures Trading Commission announced Wednesday that it had struck a settlement with the Wall Street giant, after charging that from 2007 to 2012 the firm’s traders deliberately tried to skew a key benchmark to maximize profits for Goldman’s own derivatives positions.
The regulator found that Goldman traders referred to the “jacked rate” and “gamed the fix” in working to skew the benchmark to benefit the firm. Wednesday’s settlement marks the latest in a long-running series of enforcement actions taken by regulators against major financial institutions that worked to deliberately misrepresent key benchmark rates for financial markets to protect in-house profits.
Specifically, the CFTC found that Goldman traders for years conspired to rig the U.S. Dollar International Swaps and Derivatives Association Fix, otherwise known as ISDAFIX. That rate serves as a global benchmark for a wide range of derivatives and interest rate swaps, and is meant to represent the prevailing daily market rate that should serve as a basis for other trades.