Goldman Sachs Faces Scrutiny Related to High-Speed Trading, Hiring

Discussion in 'Wall St. News' started by RedDuke, May 9, 2014.

  1. RedDuke

    RedDuke

    From wsj.com :

    Goldman Sachs Group Inc. said it had drawn scrutiny in regulatory inquiries related to its high-frequency trading and whether its hiring practices complied with U.S. antibribery laws, according to a securities filing.

    References to the investigations appeared in Friday's quarterly filing with the Securities and Exchange Commission, in a list of reviews Goldman faces from government agencies and industry regulators. It marked the first time Goldman had disclosed each probe publicly. A spokesman for the bank declined to comment.

    The SEC, the U.S. Justice Department, the Federal Bureau of Investigationand New York Attorney General Eric Schneiderman are all reviewing the role high-speed traders have played in the stock market.

    Mr. Schneiderman is seeking details about whether high-speed trading firms have secret arrangements with stock exchanges or other trading venues, such as dark pools, that give them the ability to trade ahead of other investors, The Wall Street Journal has reported.

    The attorney general's office has sent requests for information to a number of banks that run dark pools, including Goldman and Barclays PLC, people familiar with the matter said.

    Goldman has had discussions over the future of its private stock-trading venue, called Sigma X, and its options include shutting it down, the Journal has reported. No decision is imminent.

    Many big investors have said they want banks to offer dark pools, because the venues offer more anonymity and lower trading costs.

    In Friday's filing, Goldman also said it was a defendant in an April 18 class-action lawsuit related to high-speed trading. The action alleges that a number of exchanges and securities firms violated market-manipulation and insider-trading rules.

    The Journal reported earlier this week that the SEC had expanded its probe into large banks' hiring practices in Asia, and had sought more information from at least five firms, including Goldman.

    The New York bank raised the top end of its range of "reasonably possible" legal losses to $3.7 billion, above what it had already set aside in reserves. In February, the estimate stood at $3.6 billion.

    Goldman said its traders had three losing days during the first quarter, though they tallied more than $100 million in net revenues on 12 occasions, according to the filing.