Nobody at Goldman Sachs will go hungry as a result of the £17.5m fine for the firm from the Financial Services Authority. The sum is a trifle. But it is still the second-largest fine handed out by the UK regulator and the top brass at the firm, especially some senior partners in London, should be embarrassed.

Goldman's misdemeanour was a spin-off of the US securities & exchange commission's investigation into the Abacus transaction that resulted in a thumping $550m settlement, but it was serious nonetheless. The bank breached the FSA's principle 11, one of the sacred creeds. This states that a firm must deal with its regulators in "an open and cooperative way" and must disclose to the regulator anything "of which the FSA would reasonably expect notice". The FSA rarely catches big fish on those blunt hooks.

The offence was basic. It seems Goldman's compliance department in London learned of the SEC investigation only when the American regulator went public on 16 April this year. But the SEC had served a notice of likely enforcement on Fabrice Tourre, a member of the Abacus team, the previous September. By then, Tourre had been on the FSA's approved list for almost a year. Nobody at Goldman thought to tell the FSA about the so-called "Wells notice" and the computer systems did not flash a warning.

Goldman takes comfort that the FSA does not allege intention to deceive. True, but feel the grimace in the bank's brief response that it is "pleased this matter is resolved". What about the explanation of why the controls were defective?

The FSA, on a mission to be feared, will be more than pleased. Just don't ask why the lines of communication between the UK and US regulators also appear less than perfect in this tale.