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According to The Wall Street Journal, securities regulators will be heading over to Goldman Sachs (NYSE: GS) to examine weekly meetings where research analysts give tips to traders and big clients.
The problem, as regulators may view it, is that financial firms are not treating all clients equally. Should there be an expectation for equal treatment? Theoretically, yes. But do I expect GS to share trading tips with me for free? Nope.
Goldman is reportedly thinking about disclosing the trading huddles to all of its clients. Sometimes, these tips have been different than the firm's long-term research.
People familiar with the situation told the Journal that the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) are going to ask Goldman for more information on these weekly meetings, which GS calls huddles.
The topics of these huddles are not currently disclosed in the firm's long-term research, although GS discussed adding information about these meetings on its client Web site.
What the company should do is disclose when its short-term views differ from its long-term views. It is important to note that Goldman has not been accused of violating any securities laws in its distribution of the trading tips. These tips are often given to top clients who have asked for the information and take part in short-term investments.
The SEC, so far, has no comment on the matter.
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Reader Comments (Page 1 of 1)
8-25-2009 @ 2:30PM
tpcc55 said...
anyone who has worked either on the buy-side (investors) or the sell-side (brokers) would know this news is a complete waste of time. that's why you see NO reaction from people who are actually in the investing business.