“Have your screen guy go to the bathroom. You don’t need to move tens for the next 10 minutes,” the trader instructed on a recorded phone call, referring to products that would affect the rate for 10-year maturities, according to a settlement between Goldman and the Commodity Futures Trading Commission announced Wednesday.
Just before the Isdafix benchmark was set at 11 a.m., the Goldman trader followed up with an email to the broker, working at another firm that isn’t named in the settlement: “spend what you need, but make SURE we get the print,” or the rates captured each day at 11 a.m.
Goldman agreed to pay $ 120 million to settle claims that its traders worked to manipulate the benchmark to benefit the bank’s positions. It didn’t admit or deny wrongdoing.
A spokesman for the bank said: “We are pleased to have resolved these matters and have already taken steps to enhance our policies and procedures.”
The settlement is the latest in a series of related cases, as regulators work through investigations into banks’ alleged manipulation of a range of benchmarks including Isdafix and the London interbank offered rate, or Libor.
Citigroup paid $ 250 million to resolve similar Isdafix claims from the CFTC in May. A year earlier, Barclays was fined $ 115 million in a similar case.
As in past cases, the latest settlement paints a picture of Goldman traders aggressively trying to move the Isdafix benchmark through executing trades around the 11 a.m. setting of the rate and through submissions to the broker who calculated the rate.
In one 2008 episode cited in settlement, the swaps desk entered into a transaction just before 11 a.m. Later in the day, a colleague who traded with the desk using the Isdafix rate complained: “So you gamed the fix and then charged us on top of it?”
The benchmark manipulation investigations have led top global banks to pay billions of dollars in penalties and in some cases face criminal charges. The initial investigations into the manipulation of the Libor interest-rate benchmark quickly expanded to examine similar patterns in other products. Last year, five global banks including Citigroup and JP Morgan agreed to pay more than $ 5 billion to resolve probes into whether traders colluded to move foreign-currency rates for their own benefit.
The series of cases “demonstrates the breadth of this kind of misconduct across the industry,” said the CFTC’s enforcement director, Aitan Goelman.
The CFTC said in the settlement that Goldman’s cooperation in the early stages of the investigation was “not satisfactory,” and said the firm didn’t produce documents quickly enough and initially failed to provide some relevant documents.
—Gunjan Banerji contributed to this article.
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com
This article was first published by The Wall Street Journal