GS Clears Regulatory Hurdle as Fed Ends 2018 FX Enforcement Action

Goldman Sachs Group GS cleared a key regulatory overhang as the Federal Reserve Board terminated its 2018 enforcement action tied to the bank’s foreign exchange (FX) trading operations. The case originated in May 2018, when the Fed imposed a $54.75-million fine on Goldman Sachs for unsafe and unsound practices in its forex business.

The regulator had identified gaps in internal controls and oversight, particularly around traders handling U.S. dollar and foreign currency transactions for both clients and the firm’s own accounts.

The enforcement action was part of a broader global regulatory push to tighten standards in FX markets, where multiple banks faced scrutiny over conduct and governance lapses.

In Goldman Sachs’ case, the focus remained on weaknesses in compliance infrastructure rather than explicit findings of market manipulation. The Fed’s order required the firm to enhance its internal controls, improve supervision and bolster compliance risk management systems.

GS subsequently undertook a multi-year remediation effort, upgrading surveillance frameworks, tightening monitoring processes and reinforcing accountability across its trading operations. These steps were aimed at ensuring better monitoring of trader behavior and aligning operations with evolving regulatory expectations. The Federal Reserve’s decision to close the action reflects its confidence that Goldman Sachs has effectively addressed the deficiencies and established sustainable controls.

GS to Benefit From Enforcement Action Termination

For Goldman Sachs, the development marks the resolution of a legacy issue tied to industry-wide FX scrutiny. While the case underscored past control deficiencies, its closure highlights the bank’s progress in strengthening compliance and restoring regulatory confidence, allowing it to move forward without the burden of an outstanding enforcement action.

Since ongoing enforcement actions often require significant management bandwidth, including reporting obligations and regulatory engagement, with the case now closed, the company’s leadership can focus more on core businesses like investment banking, trading and asset management rather than remediation efforts.

Goldman Sachs’ Price Performance & Zacks Rank

In the past six months, GS shares have gained 14.9% compared with the industry’s growth of 5.5%.

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Currently, Goldman Sachs carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks (Strong Buy) here.

Other Banks’ Progress to Fix Regulatory Issues

Last month, the Fed officially terminated its 2018 enforcement action against Wells Fargo & Company WFC, marking the closure of one of the most significant regulatory penalties imposed on the bank in the aftermath of its fake-account scandal.

The central bank confirmed that WFC fulfilled all requirements under the order, including strengthening its governance and firmwide risk management. This milestone comes after years of regulatory oversight addressing deficiencies from the 2016 sales-practice scandal.

In December 2025, Citigroup, Inc. C received notable regulatory relief after the Office of the Comptroller of the Currency removed the July 2024 amendment to the bank’s 2020 consent order. The original consent order was focused on long-standing deficiencies in risk management, data governance, internal controls and compliance.

The 2024 amendment required Citigroup to submit a formal resource review process to prove it had enough staffing, systems and governance in place to fix long-standing control issues. The regulatory easing aligns with C’s broader strategy to modernize its technology and control data.

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