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Trading

Goldman Sachs to pay $109.5 million to settle claims of sharing customer information on FX trades

The Federal Reserve Board of Governors and the New York Department of Financial Services on Tuesday fined Goldman Sachs Group (GS) a total of $109.5 million to settle claims that it improperly shared customer information on foreign-exchange trades.

The Fed and the New York state department each fined Goldman Sachs $54.75 million, according to separate news releases from both agencies, which coordinated investigations of the firm.

Goldman Sachs "failed to detect and address its traders' use of electronic chatrooms to communicate with competitors about trading positions, including around benchmark fixes, and failed to detect and address the disclosure of confidential client information," according to the Fed release.

From 2008 to early 2013, according to NYDFS' release, Goldman Sachs FX traders, sometimes using code names to share confidential customer information, discussed potentially coordinating trading activity and other efforts that could improperly affect currency prices or disadvantage customers, and enable banks and traders to achieve higher FX trade profits.

Goldman Sachs said in a statement, "We are pleased to have resolved the Federal Reserve Board's and New York Department of Financial Services' respective reviews and appreciate their recognition that we have already taken significant steps to enhance our policies and procedures."

The Fed and New York announcements are the latest by international regulators of fines against banks for FX manipulation, the largest being a combined $3.4 billion in penalties in November 2014 against Citibank, HSBC, J.P. Morgan Chase, Royal Bank of Scotland and UBS from regulators in the U.S., U.K. and Switzerland.