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Goldman Sachs Will No Longer Huddle

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Despite making it clear that a huddle "is not a forum for sharing stock or sector tips to a select group of clients," Goldman has promised not to do it anymore, and to throw Massachusetts $10 million for its troubles.

Goldman Sachs agreed to pay a $10 million fine and stop holding private meetings of stock analysts and traders known as “huddles” to settle an investigation by Massachusetts’s chief securities regulator. The settlement ends a two-year probe by William Galvin, the secretary of the commonwealth, into New York-based Goldman Sachs’s “Asymmetric Service Initiative,” in which information on analysts’ recommendations was disseminated earlier to favored clients. The company will “permanently discontinue” the practice, Galvin’s office said in a statement today.

The investigation concluded that the dissemination by equity analysts of unpublished short-term trading ideas was "a dishonest and unethical violation of the Massachusetts Uniform Securities Act by putting certain clients at an advantage over others,’’ Galvin’s office said in the statement.

[Bloomberg via BI]

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A week ago today, a man named Greg Smith resigned from Goldman Sachs. As a sort of exit interview, Smith explained his reasons for departing the firm in a New York Times Op-Ed entitled "Why I Am Leaving Goldman Sachs." The equity derivatives VP wrote that Goldman had "veered so far from the place I joined right out of college that I can no longer in good conscience say I identify with what it stands for." Smith went on to note that whereas the Goldman of today is "just about making money," the Goldman he knew as a young pup "revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients." It was a culture that made him "love working for the firm" and its absence had stripped him of "pride and belief" he once held in the place. While claiming that Goldman Sachs has become virtually unrecognizable from the institution founded by Marcus (Goldman) and Samuel (Sachs), which put clients ahead of its own interests, is hardly a new argument, there was something about Smith's words that gave readers a moment's pause. He was so deeply distraught over the differences between the Goldman of 2012 and the Goldman of 2000 (when he was hired) that suggested...more. That he'd seen things. Things that had made an imprint on his soul. Things that he couldn't forget. Things that he held up in his heart for how Goldman should be and things that made it all the more difficult to ignore when it failed to live up to that ideal. Things like this: