Goldman Sachs tipped off on 30-year bond - WSJ
Monday November 12, 10:35 am Eastern Time
NEW YORK, Nov 12 (Reuters) - Investment banking giant Goldman Sachs Group Inc.
(NYSE:GS - news) said it was tipped off about the Treasury Department's plans to stop
selling the 30-year bond, the Wall Street Journal reported on Monday.
The information may have helped the firm decide its trading strategy for
Treasury bonds before the news was officially announced on Oct. 31, the
paper said, citing people familiar with the matter.
``When we became aware of this situation we contacted the appropriate
authorities to inform them of Mr Davis' call and provide them with any
and all information that might be of assistance to them in connection with
any review they wish to conduct,'' Goldman said in a statement. ``We do
not believe we have engaged in any wrongful behavior.''
Washington consultant Pete Davis allegedly leaked the information to
some clients ahead of the announcement, which had been embargoed to
10 a.m. The U.S. Securities and Exchange Commission said last week it
was investigating the leak.
The Wall Street Journal said that Goldman Sachs's access to the leaked information could indicate that the unauthorized information was more widely spread throughout the bond market than was initially thought.
The paper said that it wasn't known whether Goldman made any profit through its access to the information, nor was it clear that trading on such information violates any securities laws.
Two firms, Princeton, New Jersey-based Stone & McCarthy Research Associates and Rye, New York-based Capra Asset Management, that keep close tabs on the bond markets have already said they were contacted ahead of the embargo with the news.
Goldman contacted the Securities and Exchange Commission and the Treasury to discuss the matter after reading news reports of the leak, the Journal said. The SEC has started an inquiry into the firm's activities, along with those of other firms, and Goldman is sharing trading and phone records with investigators, the report said.
The Journal quoted Goldman as saying in a statement that it doesn't believe it has engaged in any wrongful behavior and would assist the authorities in any way it could.
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