--Goldman Sachs is being accused by the Massachusetts Security Division of improperly passing tips to clients;
--Goldman Sachs is being investigated by the SEC and FINRA (Financial Industry Regulatory Authority) for communications and research practices;
--Goldman Sachs is accused by the CFTC of "aiding and abetting, civil fraud and supervision-related charges." Also see here.
Surely there are more accusations to come.
UPDATE 3-Regulators probe Goldman analyst communications
Regulators looking at analyst, staff, client discussions
. . . .
by Lauren Tara LaCapra - Reuters
NEW YORK, May 10 (Reuters) - Massachusetts securities regulators may charge Goldman Sachs Group Inc (GS.N) with improperly passing along analysts' tips to top clients.
The Massachusetts Securities Division is weighing administrative proceedings against the bank over communications among its analysts, sales staff and clients, according to Goldman's quarterly filing with U.S. regulators.
The U.S. Securities and Exchange Commission, Financial Industry Regulatory Authority and others are investigating similar matters, Goldman said. The investment bank said it is cooperating with the probes but did not provide more detail.
Goldman and its Wall Street peers are dealing with myriad regulatory probes in the wake of the financial crisis.
Massachusetts Secretary of State William Galvin, the state's top financial regulator, said in the past that he was investigating Goldman and had subpoenaed information about how the bank might have passed along short-term trading tips of its analysts to top clients.
In 2009, Galvin said he was concerned the analysts might pass along their best ideas improperly during weekly meetings called "huddles."
Galvin's office declined to comment on Tuesday, except to confirm the accuracy of Goldman's statements in its filing.
In 2003 Galvin was among a group of regulators who negotiated a $1.4 billion settlement over research practices of big Wall Street firms, including Goldman. Banks were accused of issuing overly optimistic research on companies to win their investment banking business.
A question now is whether Goldman is meeting the terms and spirit of that settlement. As part of the settlement, 10 Wall Street banks agreed to separate their research and banking businesses with a so-called "Chinese wall" to avoid conflicts of interest. Also, research analysts were prohibited from soliciting investment banking business, and their compensation was not to be based on performance of that division.
Goldman also said in its Tuesday filing that Commodity Futures Trading Commission staff had told the bank's execution and clearing unit that they will recommend the CFTC bring charges against the unit. The charges would be linked to Goldman's clearing trades for a broker-dealer.
Read the entire article here