Goldman Sachs has agreed to pay a $6 million fine to the U.S. Securities and Exchange Commission (SEC) on Monday, following an investigation that revealed the banking heavyweight had provided incomplete and inaccurate trading information over a decade-long period. The SEC found that Goldman Sachs was responsible for submitting 22,000 inadequate 'blue sheet' submissions between 2012 and 2022, affecting over 163 million transactions. The bank has acknowledged the findings and is currently rectifying its remaining EBS deficiencies.
The announcement of the penalty resulted in Goldman Sachs' shares declining by 0.9% at the end of Friday trading. This follows a steady decline of 4.8% since a 6% increase from September 11 to 14. Overall, Goldman Sachs' share price has dropped by 5.29% in 2023.
In addition to the fine, Goldman Sachs is also dealing with the fallout from its acquisition of fintech lender GreenSky. Purchased for $2.24 billion in an all-stock transaction in 2021, the lender is now expected to be sold for just $500 million. Advanced negotiations are reportedly underway with a consortium of investors including Sixth Street, Pacific Management Investment, and KKR.
The bank's venture into consumer banking has resulted in $3 billion in losses, leading to a strategy shift back towards core business areas and a divestment of most unsecured consumer loans since last year. Its second-quarter earnings report showed an earnings per share of $3.08 compared to the expected $3.18, and an 8% decrease in revenue from the previous year at $10.9 billion.
Despite these challenges, Goldman Sachs has seen some success with several market debuts it has led recently, including the Arm IPO which boosted the British chip designer's valuation to $65 billion. However, investor concerns remain as share prices of newly listed companies like Arm and Instacart have seen significant drops since their debuts.
As part of its cost-saving strategy, Goldman Sachs is planning another round of job cuts that could result in a 5% reduction in global headcount. This follows previous layoffs conducted by the bank in its efforts to achieve $1 billion in cost savings.
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