Goldman caught front-running

[Dave Farber <dave () farber net>]

Begin forwarded message:

> From: Richard Forno <rforno () infowarrior org>
> Date: January 12, 2010 1:56:42 PM EST
> To: Infowarrior List <infowarrior () attrition org>
> Cc: Dave Farber <dave () farber net>
> Subject: Goldman caught front-running

> (Yet another reason why analysis/calls/'recommendations' from  
> brokers should be avoided for serious trading.  If you want to read  
> 'analysis' from brokers - which is always helpful food for thought -  
> ask to see their advice to "institutional" investors instead....and  
> don't be surprised if they are telling institutions to sell  
> something while telling retail investors to buy the same thing.  For  
> more info, check out McClellan's "Full of Bull" from Amazon. -rick)
>
>
> Goldman Acknowledges Conflicts With Clients
> January 12, 2010, 11:30 am
> http://dealbook.blogs.nytimes.com/2010/01/12/goldman-executive-discloses-conflicts-policy/?
> A senior Goldman Sachs executive sent an e-mail message to clients  
> on Tuesday disclosing that the firm’s Fundamental Strategies Group m 
> ight have shared investment ideas with the firm’s proprietary tradin 
> g group or some clients before sharing them with others.
>
> The e-mail message, obtained by DealBook, demonstrates the various  
> conflicts that Goldman and other firms face in balancing the  
> interests of its various clients and its own trading operation.  
> (Read it after the jump.)
>
> “We may trade, and may have existing positions, based on trading ide 
> as before we have discussed those trading ideas with you,” Thomas Ma 
> zarakis, head of Goldman’s Fundamental Strategies Group, wrote.
>
> The message was meant to clarify the firm’s conflict-of-interest pol 
> icy. Goldman and other firms have come under criticism for trading a 
> head of, or at odds, with its own clients. In one such situation, ra 
> ised in my column on Tuesday, Goldman created and sold bundles of mo 
> rtgages known as collateralized debt obligations while at the same t 
> ime selling them short.
>
> Lucas Van Praag, a Goldman spokesman, declined to comment.
>
> < - >
>
> http://dealbook.blogs.nytimes.com/2010/01/12/goldman-executive-discloses-conflicts-policy/



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