A UK financial regulator has fined Goldman Sachs $30 million for failing to tell the regulator that it was being investigated by US authorities. An authority in the financial services revealed that the US arm of Goldman Sachs refused to share key critical information about the US investigation of the sub prime mortgage products for more than 18 months. This deliberate omission implies that the FSA was not notified by Goldman that it and trader Fabrice Tourre has been warned and short listed by the United States Securities and Exchange Commission on likely charges of fraud. This happened at the time when Tourre was believed to be working in London in a function that FSA needs to approve.

Charges were filed by SEC in April 2010 and a settlement of $550 million was reached in July. Even now Mr. Tourre is still contesting allegations of his supposedly misleading of investors in a complex mortgage-backed security known as Abacus. The FSA intimated that the officials of Goldman Sachs should have notified them about the probe since early February 2009 but no later than when the giant investment bank started receiving the Wells notice warning of potential charges.

The managing director of enforcement and financial crime of the FSA said “we have repeatedly stressed the importance of firms self reporting regulatory issues to the FSA in a timely way. GSI did not set out to hide anything but its defective systems and controls meant that the level of and quality of its communications with the FSA fell far below what we expect of an authorized firm. This penalty should send a message – particularly to the senior management of large institutions – of the need to have their firms UK reporting obligations at the forefront of their minds.” She concluded.

Meanwhile, Fiona Laffan the spokeswoman of Goldman Sachs said she is relieved the matter has been resolved. A discount was received by Goldman for settling the case at its early stage. The fine would have been $25 without it. Mr. Tourre’s attorney was not available for a comment.

The fine is considered to be the third largest in the history of FSA. The largest was recorded by JP Morgan when it paid 33 million pounds ($51 million) for failing to keep client money in separate accounts. The reputation of Goldman which is the best known investment bank in the world has been repeatedly tarnished in recent times as rumors continue to make rounds that it favors the interest of certain clients at the expense of others during the financial crisis.