Goldman Sachs to Review Policy on Conflicts of Interest (GS, KMI, EP, BCS, BAC, C)

Banking, finance, and taxes

Published: March 16, 2012 12:23 pm

Mergers and acquisitions bankers may become subject to stricter rules for revealing their personal investments as a result of a review now being conducted at Goldman Sachs Group Inc. (NYSE: GS). A Delaware judge recently scolded Goldman for failing to disclose its top M&A banker’s personal $340,000 investment in Kinder Morgan Inc. (NYSE: EP) to El Paso Corp. (NYSE: EP) while the bank was negotiating the $21 billion acquisition of El Paso by Kinder Morgan.

According to a report in The Wall Street Journal, “Many bankers said they consider personal stockholdings a ‘common-sense’ disclosure. As a result, conflicts due to a financial adviser’s personal holdings rarely become a problem … .” The report also noted that Barclays plc (NYSE: BCS), Bank of America Corp. (NYSE: BAC), and Citigroup Inc. (NYSE: C) are also reviewing their conflict of interest rules.

Goldman Sachs is under particular scrutiny now, following the publication of a scathing op-ed piece by one of its former executive directors.

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