Usually the minute that a Goldman Sachs employee is implicated in a legal scandal, the firm’s employees are notified internally – often by email.
No such notification has gone out yet regarding the FBI investigation that is rocking the hedge fund world, and in which several “low-level” Goldmanites are entangled.
But that doesn’t mean that speculation isn’t running wild inside the bank’s 2 West Street offices.
A source inside the bank said that buzz was all about the scandal yesterday, and that Goldmanites are placing the highest probability on the link being to DiamondBack, rather than Level Global or Loch Capital.
We were surprised by this since the bank had recently bought a minority stake in Level Global – so this seemed, to us, the most obvious link. But of course, this is all just water-cooler gossip anyway… at the moment.
But, even considering that this is all just speculation for the time being, it’s still interesting that Goldman workers believe the most likely scenario is that it will be a trader who works on the DiamondBack account. There have also been suggestions that someone in the M&A division traded on material non-public information, and it was acted on by one or more parties.
“The SEC is all over us at the moment,” our source told us. “I wouldn’t be surprised if this is about one email.”
We and our source understand that the current probe involves the FBI, rather than the SEC, but the person was highlighting the constant level of scrutiny that the bank has been under since the Abacus scandal.
Another thing that is interesting about this is that Goldman employees, like the hedge funds, can only speculate at the moment about what’s going on – no-one seems to know a thing.
No-one, except the FBI.