Goldman fined £20m by FSA

BBC business editor Robert Peston on subprime fall-out

I can reveal that Goldman Sachs has been fined around £20m by the Financial Services Authority for failing to tell the City regulator that it was being investigated by the SEC - the US regulator - for alleged fraud over the way it sold a subprime mortgage investment.

Goldman also failed to tell the FSA that Fabrice Tourre, the executive who created the relevant mortgage product, was under investigation: this was relevant because Mr Tourre transferred from the US to London, and therefore had to be authorised by the FSA.

The FSA accused Goldman of failing to have the necessary systems for keeping it informed of investigations by other regulators. Goldman has admitted that it made a mistake.

I understand that Goldman would have been fined more, but received a discount for early settlement.

The FSA announced in April it was investigating Goldman, but never disclosed why it was doing so.

The £20m is one of the heaviest fines ever imposed by the FSA.

In July, Goldman settled the fraud charge with the SEC, agreeing to pay $550m.

The mortgage product at the centre of the storm was a collateralised debt obligation called ABACUS 2007-ACI.

You can keep up with the latest from business editor Robert Peston by visiting his blog on the BBC News website.

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