CFTC Fines Goldman Sachs $120 million for rate rigging

Goldman Sachs. The Goldman Sachs Group, Inc. is an American multinational finance company that engages in global investment banking, investment management, securities, and other financial services including asset management, mergers and acquisitions advice, prime brokerage, and securities underwriting services.

This page was last edited on 14 December , at As Undersecretary of the Treasury for Domestic Finance, Gensler advised and assisted Treasury Secretaries Robert Rubin and Lawrence Summers on all aspects of domestic finance, including formulating policy and legislation in the areas of financial institutions, public debt management, capital markets , government financial management services, federal lending, fiscal affairs, government sponsored enterprises, and community development. As they say on the Street, "When the ducks quack, feed them. Documents under seal in a decade-long lawsuit concerning eToys.

BehaviourExchange

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The index was originally developed in , by Goldman Sachs. The index currently comprises 24 commodities from all commodity sectors - energy products, industrial metals, agricultural products, livestock products and precious metals.

When industrialised economies dominate world growth, the metals sector of the GSCI generally responds more than the agricultural components. Conversely, when emerging markets dominate world growth, petroleum-based commodities and agricultural commodities tend to be more responsive. Production weighting is a quintessential attribute for the index to be a measure of investment performance. This is achieved by assigning a weight to each asset based on the amount of capital dedicated to holding that asset just as market capitalisation is used to assign weights to components of equity indices.

Since the appropriate weight assigned to each commodity is in proportion to the amount of that commodity flowing through the economy, the index is also an economic indicator.

Goldman Sachs' entry into the commodities market via the Goldman Sachs Commodity Index has been implicated by some in the — world food price crisis. In a article in Harper's magazine, Frederick Kaufman accused Goldman Sachs of profiting while many people went hungry or even starved.

He argued that Goldman's large purchases of long-options on wheat futures created a demand shock in the wheat market, which disturbed the normal relationship between Supply and Demand and price levels. He argues that the result was a ' contango ' wheat market on the Chicago Mercantile Exchange, which caused prices of wheat to rise much higher than normal, defeating the purpose of the exchanges price stabilization in the first place.

However, in a Jun article in The Economist , the argument is made that Index-tracking funds of which Goldman Sachs Commodity Index was one did not cause the bubble. It describes a report by the Organisation for Economic Co-operation and Development that used data from the Commodity Futures Trading Commission to make the case.

Additionally, Goldman is one of the banks whose data daily set the benchmark. Also, it made a false submission to distort the rate at the expense of counterparties. These financial products include interest-rate swaps and derivatives.

This is not the first time that the agency fines a company for manipulating benchmark interest rates. As the agency fined Citigroup and Barclays for the same action trying to manipulate the same benchmark interest rate.

Additionally, the regulator took an enforcement action against the wrongdoers as the individual and his firm provided misleading account statements. Maya Mandzikasvili 2 January Bitcoin Promotes Liberty Over the World. Samson Ononeme 31 December Price is what you pay — value is what you get!

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