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Goldman fined $10 million and to stop trading 'huddles'

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Goldman Sachs finedGoldman Sachs Group Inc agreed on Thursday to pay a $10 million fine and stop giving favored clients trading ideas developed at internal gatherings known as "trading huddles."

The accord with Massachusetts' securities regulator resolves charges that Goldman analysts gave "priority" clients, including hedge funds that trade rapidly, short-term trading tips that might be at odds with the bank's published research, violating state law.

"The real issue is fairness in the marketplace," William Galvin, Massachusetts' Secretary of the Commonwealth, said in an interview. "Certain customers were preferenced over other customers and we regard that as unethical behavior. This is a recurring theme in the securities industry, where some customers get special inside information and others do not."

Stephen Cohen, a Goldman spokesman said the bank is pleased to settle the matter, which includes no admission of fraud.

According to a consent order, Goldman research analysts and traders began holding huddles in 2006 in which they discussed topics, including short-term trading ideas.

Analysts were expected to follow "Rules of the Road" that included a ban on "selective disclosure" of pending changes in stock ratings, earnings forecasts and share price targets.

TVNL Comment: Lunch money fine and a slap on the wrist for committing major fraud.  No surprise.


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