Goldman Investigated by U.K. Regulator
on Ashanti, newspaper says
London, Dec. 6 (Bloomberg) -- The Financial Services
Authority, Britain's financial regulator, is
investigating a potential conflict of interest
involving Goldman Sachs Group Inc.'s role in advising
Ashanti Goldfields Co., the Financial News reported,
without citing sources.
Accra, Ghana-based Ashanti, which bet gold prices would
stay low, revealed losses on derivative contacts after
the metal soared at the end of September and faces the
threat of bankruptcy over margin calls fror the 17
banks, including Goldman, which had contracts with the
company.
The FSA needs to make sure that, although Goldman was
entering into derivative contracts on behalf of clients
and not for itself, adequate steps were taken to ensure
potential conflicts of interest didn't come into play,
the paper said, while some outside Ashanti shareholders
want to see action considered against Goldman and
others for misselling derivatives, the paper reported,
citing independent investor Colin Kingsnorth.
* * *
Sources tell GATA that Goldman represents 30-35 percent
of the gold market in New York.
A leading Canadian brokerage has told our sources that
Goldman Sachs is by far the major gold trader in the
United States. Their known gold producer client base
would not suggest that they be such an overwhelming
market factor. The quiet word is that they are
facilitating orders for the U.S. Federal Reserve System
or the U.S. Treasury Department or both. |
