Financial Regulatory Forum

BREAKINGVIEWS – How Goldman Sachs fell out with the SEC

– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –

By Nicholas Dunbar

LONDON, April 20 (Reuters Breakingviews) – In December 2000 I received an email from the Goldman Sachs press office in New York, nominating the firm for Risk magazine’s “Risk Manager of the Year” award. Central to the pitch was how the Wall Street bank had run a boot camp for its supervisors at the U.S. Securities and Exchange Commission, training them in concepts like value-at-risk and derivatives hedging.

It was a win-win move, both sides told me. Goldman ensured its regulator was up to date with financial innovation and earned brownie points for its efforts. By offering a “light-touch” regime for its charges, the SEC hoped to prevent the securities firms under its purview from basing their fast-growing over-the-counter derivatives operations in London.

I was technical editor of Risk at the time and I remember feeling a sense of wonder at the regulator’s willingness to take lessons from one of the firms it policed. But I also accepted that Goldman was motivated by good citizenship. If derivatives were coming to Wall Street, why shouldn’t Wall Street’s best firm join forces with its watchdog to ensure that everything was done properly? The Risk Manager of the Year Award for 2001 went to…Goldman Sachs.

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Goldman Sachs profit tops forecast, UK opens probe

A security guard walks through Goldman Sachs lobby in New York   By Steve Eder and Steve Slater
   NEW YORK/LONDON, April 20 (Reuters) – Goldman Sachs Group Inc <GS.N> said first-quarter earnings nearly doubled, and Britain’s financial regulator launched a formal probe related to civil fraud allegations against the Wall Street bank. (more…)

UK launches formal probe into Goldman Sachs

   LONDON, April 20 (Reuters) – Britain’s financial regulator started a formal enforcement investigation into Goldman Sachs <GS.N> on Tuesday, four days after U.S. regulators filed a fraud case against Wall Street’s biggest investment bank. (more…)

BREAKINGVIEWS-How Goldman Sachs fell out with the SEC

   By Nicholas Dunbar — The author is a Reuters Breakingviews columnist. The opinions expressed are his own –
   LONDON, April 20 (Reuters Breakingviews) – In December 2000 I received an email from the Goldman Sachs <GS.N> press office in New York, nominating the firm for Risk magazine’s “Risk Manager of the Year” award. Central to the pitch was how the Wall Street bank had run a boot camp for its supervisors at the U.S. Securities and Exchange Commission, training them in concepts like value-at-risk and derivatives hedging. (more…)

SEC may have hard time finding other suits like Goldman

By Matthew Goldstein

NEW YORK, April 19 (Reuters) The civil lawsuit filed by securities regulators against Goldman Sachs Group from the sale of a security linked to subprime mortgages may not open the floodgates for similar enforcement actions of its kind as some believe might happen.

In fact, the case lodged by the Securities and Exchange Commission against Goldman and a 31-year-old bond salesman may prove to be more rare than initially believed, a close reading of legal documents in the matter reveals.

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ANALYSIS – US SEC’s new claws send shiver down Wall St

By Dan Margolies and Rachelle Younglai

WASHINGTON, April 16 (Reuters) – The U.S. Securities and Exchange Commission’s fraud suit against Goldman Sachs sent a shiver down the spine of Wall Street, a sign the agency is determined to be an aggressive enforcer.

Wall Street’s largest bank stands accused of marketing a debt product tied to subprime mortgages that the SEC says was destined to fail.

There were fears on Wall Street the suit could cast a regulatory cloud over the entire investment banking industry.

Rep Frank says Goldman case helps financial reform

    WASHINGTON, April 19 (Reuters) – U.S. Representative Barney Frank said on Monday that securities regulators’ fraud case against Goldman Sachs <GS.N> increases the chance that financial reform will pass. (more…)

BREAKINGVIEWS-Goldman’s CDO investors: fools or victims?

   By Hugo Dixon and Richard Beales
   LONDON/NEW YORK, April 19 (Reuters Breakingviews) – Were the investors who lost $1 billion by buying a fearfully complex product sold by Goldman Sachs <GS.N> in the dying days of the credit boom fools or victims? That’s the key distinction on which the U.S. Securities and Exchange Commission’s fraud charges, which roiled the investment bank when they were unveiled on Friday, hinge. (more…)

UK’s Brown wants investigation into Goldman Sachs

   By Adrian Croft
   LONDON, April 18 (Reuters) – Prime Minister Gordon Brown said on Sunday he wanted Britain’s financial watchdog to investigate U.S. bank Goldman Sachs <GS.N> after it was charged with fraud by U.S. regulators. (more…)

Goldman makes financial reform passage certain: John Kemp

      By John Kemp — John Kemp is a Reuters columnist. The  views expressed are his own – 
   LONDON, April 16 (Reuters) – It is now virtually certain financial reform legislation will go sailing through the Senate, following the complaint filed against Goldman Sachs <GS.N> and an employee in the U.S. District Court for the Southern District of New York by the Securities and Exchange Commission this afternoon. (more…)

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