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Goldman (GS) to Settle Rate-Rigging Lawsuit for $130 Million - Analyst Blog

Goldman Sachs Group Inc.GS has reportedly agreed to pay $130 million toward the settlement of investor lawsuits filed against it on May 31. Per the lawsuit, the company was involved in the manipulation of prices in the foreign exchange market.

According to a Bloomberg report, investors have alleged that currency traders of banks, including Goldman, JPMorgan Chase & Co JPM and Deutsche Bank AG DB , shared confidential information of clients through closed chat rooms, and manipulated the benchmark rates. This charge was supported by claims of unusual trading activities during times when rates were calculated. Apparently, these rates are compiled and published, a few hourly and others half-hourly, by Reuters and Boston-based World Markets Co.

Based on sources, the final agreement is expected to be reached in a couple of weeks.

A similar lawsuit was filed in Mar 2015 by The Federal Deposit Insurance Corp. (FDIC) against foreign banks as well as the British Bankers Association ("BBA") for their alleged role in manipulating the London Interbank Offered Rate ("LIBOR"). Bank of America Corp BAC and JPMorgan paid $180 million and $99.5 million, respectively, toward settlement of the lawsuit.

Though litigations and probes are nothing new for banks, lawsuits like these tarnish the image of a financial institution. Further, related settlements adversely impact the company's commercials.

Currently, Goldman carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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