US REGULATORS said yesterday that Goldman Sachs will pay $22m (£14m) to settle civil charges over allegations that it lacked adequate policies to prevent its analysts from sharing non-public information with Goldman traders and select clients.
The charges stem from a practice known as “huddles” at Goldman, which came to light several years ago. Stock research analysts would meet traders to share their best trading ideas, which were then passed along to preferred clients. The charges did not include any allegations of insider trading.
“Despite being on notice from the SEC about the importance of such controls, Goldman failed to implement policies and procedures that adequately controlled the risk that research analysts could preview upcoming ratings changes with select traders and clients,” said Robert Khuzami, the SEC’s head of enforcement.
Goldman agreed to pay the penalty and revise its policies to correct the problem.
A spokesman for the bank, Michael DuVally, said Goldman was pleased to resolve the matter.
City A.M. Reporter