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Goldman settles with SEC over ‘huddles’
Source: Financial Times
April 12, 2012 7:44 pm
Goldman settles with SEC over 'huddles'
By Kara Scannell in New York
Goldman Sachs has agreed to pay $22m to settle allegations that it failed to have adequate procedures in place to prevent the transfer of inside information to hedge funds during analyst “huddles”.
The Securities and Exchange Commission and the Financial Industry Regulatory Authority alleged that the investment bank failed to monitor properly the huddles where Goldman equity research analysts shared their best trading ideas with traders and later select clients, including hundreds of hedge funds, from 2006 to 2011.
According to the SEC administrative proceeding, Goldman’s deficient compliance procedures posed a “serious risk” that material non-public information, such as rating changes or the placing of stocks on the Wall Street firm’s “conviction list” of best ideas, could be misused.
With a few exceptions, the SEC alleged, Goldman failed to review whether analysts disclosed future ratings changes to clients during the huddles.
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Goldman settles with SEC over 'huddles'
By Kara Scannell in New York
Goldman Sachs has agreed to pay $22m to settle allegations that it failed to have adequate procedures in place to prevent the transfer of inside information to hedge funds during analyst “huddles”.
The Securities and Exchange Commission and the Financial Industry Regulatory Authority alleged that the investment bank failed to monitor properly the huddles where Goldman equity research analysts shared their best trading ideas with traders and later select clients, including hundreds of hedge funds, from 2006 to 2011.
According to the SEC administrative proceeding, Goldman’s deficient compliance procedures posed a “serious risk” that material non-public information, such as rating changes or the placing of stocks on the Wall Street firm’s “conviction list” of best ideas, could be misused.
With a few exceptions, the SEC alleged, Goldman failed to review whether analysts disclosed future ratings changes to clients during the huddles.
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Read more: http://www.ft.com/cms/s/0/9815dc7a-84c0-11e1-b4f5-00144feab49a.html#axzz1rr8ymgb9
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