This may not be directly related to Greg Smith, but you can’t help but think of him here.
Goldman told the WSJ that it is considering beefing up its rules about disclosing bankers’ personal investments to clients.
They’re saying it’s because of the Kinder Morgan/El Paso deal — which it seems like everyone has kind of forgotten about.
So in case you missed it, here’s what happened there: On February 29th a Delaware judge ruled that Goldman Sachs had a conflict of interest when it advised its client, El Paso, to sell itself to Kinder Morgan. The judge said that Goldman had gotten El Paso to sell below value because the bank had multi-billion dollar interest in Kinder Morgan.
The thing is, Smith accused Goldman of doing just that — screwing its clients for its own benefit.
In a statement to The Wall Street Journal, Goldman said it was reviewing its “policies and procedures [on banker conflict issues] with the goal of strengthening them..”
“Bankers will now self-disclose if they own any amount of shares,” said a lawyer for a major bank, describing the new attitude as “super-conservative. We’ll disclose anything we find and we’ll pass the ball to the company or its counsel and say, you decide what you want to do.”
Timing is everything.