Goldman Sachs has been fined $250,000 and censured by the Financial Industry Regulatory Authority (FINRA) for multiple rule breaches, including failing to address a conflict of interest in a 2021 initial public offering and allowing unregistered staff to conduct investment banking activities.
Goldman Sachs Fined $250,000 by FINRA Over IPO Conflict and Registration Failures
According to FINRA, in July 2021, Goldman acted as lead underwriter for an IPO that raised approximately $700 million.
Around 13.5% of the proceeds, $96 million, were used to repay a loan from a Goldman affiliate.
FINRA said this constituted a conflict of interest, requiring the involvement of a qualified independent underwriter (QIU) to oversee the offering.
The regulator added that no such QIU participated, meaning the bank failed to meet due diligence requirements.
Between May 2021 and March 2022, Goldman also permitted four individuals to perform investment banking work without being registered with FINRA.
The regulator found the firm’s supervisory procedures inadequate, noting that while it tracked overdue registrations, it failed to escalate or address them promptly.
FINRA concluded the bank violated multiple rules, which govern conflicts of interest, registration, and supervisory systems.
Goldman Sachs accepted the findings without admitting or denying the allegations. The settlement closes FINRA’s investigation into the matter, but the censure and fine are now part of the firm’s regulatory record.
This action follows a routine FINRA cycle examination and highlights ongoing regulatory scrutiny over IPO processes and compliance oversight in the investment banking sector.
