Goldman Sachs fined $10m over client trading ‘huddles’

10 June 2011

Goldman Sachs fined $10m over client trading ‘huddles’
Goldman Sachs has agreed to pay $10 million and stop hosting client trading ‘huddles’ following an investigation by a securities regulator.

The settlement follows a two-year investigation by the Massachusetts Securities Division into the bank’s trading huddles and whether they provided a trading advantage to priority customers.

Analysts and traders would hold regular ‘huddles’ to discuss stock movements within the markets and stocks. The information was later shared with priority clients to provide advice on short-term investment ideas.

Goldman has subsequently agreed to discontinue this practice, which was described as “dishonest and unethical” by the regulator.

A spokesman for the bank said: "We're pleased to have resolved this matter with the Massachusetts Securities Division."

The settlement documents stated that Goldman was found to have “engaged in dishonourable or dishonest conduct” - however, it was noted that nothing in it “shall be construed as a finding or admission of fraud”.

FINRA is also reported to be close to completing an investigation into Goldman’s trading huddles practice, according to an unnamed source.

By Jim Ottewill
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