January 21, 2023

Federal Reserve investigating Goldman Sachs' consumer business

Goldman Sachs head of personal finance management Joe Duran provides his 2023 market outlook and discusses the firm’s ‘tough decision’ to cut 3,200 jobs, on ‘Varney & Co.’

The Federal Reserve is investigating Goldman Sachs over the handling of its consumer business, known as Marcus, FOX Business confirmed Friday.

Goldman Sachs is under investigation by the Federal Reserve over the monitoring of its consumer business, Marcus. (Reuters Photos)

Ticker	Security	Last	Change	Change %
GS	THE GOLDMAN SACHS GROUP INC.	341.84	-8.85	-2.52%

Citing people familiar, The Wall Street Journal reported earlier in the day that the central bank has concerns that Goldman did not have proper safeguards in place at Marcus as the consumer lender’s business grew.

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Sources familiar told FOX Business that they are unsure of the seriousness of the Fed’s probe but noted that the central bank regularly examines consumer bank compliance issues and that Fed officials are stationed inside every major bank for the purpose of monitoring such issues.

The Marriner S. Eccles Federal Reserve Board building is seen in Washington, DC. The central bank is investigating Goldman Sachs over the handling of its consumer business. (Photo by SAUL LOEB/AFP via Getty Images / Getty Images)

When reached for comment, a Goldman spokesperson told FOX Business, “The Federal Reserve is our primary federal bank regulator and we do not comment on the accuracy or inaccuracy of matters relating to discussions with them.”

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The sources familiar also said the investigation is not seen as an existential threat to Goldman, but it poses another problem for beleaguered CEO David Solomon.

David Solomon, chief executive officer of Goldman Sachs Group Inc., during a Bloomberg Television at the Goldman Sachs Financial Services Conference in New York, on Tuesday, Dec. 6, 2022. (Photographer: Michael Nagle/Bloomberg via Getty Images / Getty Images)

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They added that Solomon faces pressure from partners at the megabank over his handling of the consumer business, on top of Goldman’s recent earnings miss and bonus cuts.

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