Goldman Sachs has agreed to pay a
According to the
Further, in 2007, Goldman began a program known as the Asymmetric Service Initiative (ASI) in which analysts shared information and trading ideas from the huddles with select clients.
According to the SEC’s order, the programs created a serious risk that Goldman’s analysts could share material, and nonpublic, information about upcoming changes to their published research with ASI clients and the firm’s traders. The
Despite those risks, according to the regulator, Goldman failed to establish adequate policies or adequately enforce and maintain its existing policies to prevent the misuse of material, nonpublic information about upcoming changes to its research. Goldman’s surveillance of trading ahead of research changes — both in connection with huddles and otherwise — was deficient, according to the
“Higher-risk trading and business strategies require higher-order controls,” said
Goldman agreed to settle the charges and will pay a
“Firms must understand that they cannot develop new programs and services without evaluating their policies and procedures,” said
The order issued today finds that Goldman willfully violated Section 15(g), formerly Section 15(f), of the Securities Exchange Act of 1934. The regulator censured the firm and has ordered it to cease and desist from committing or causing any violations and any future violations of this section.
Under the terms of the settlement, Goldman will pay a
Further, Goldman has agreed to complete a comprehensive review of the policies, procedures, and practices relating to the SEC’s findings in this order so as to improve its policies and procedures related to this issue.
"We are pleased to have resolved this matter,” a Goldman spokesman told Securities Technology Monitor.
This is not the first time Goldman has had to pay
In 2003, Goldman paid a
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