Goldman resignation letter. Judge's critique. Now, the fallout?
Goldman resignation letter blistered Goldman Sachs for putting its interests ahead of customers. A state judge nearly kills Goldman deal over conflict of interest. Firm now says it will try to strengthen conflict-of-interest controls, but doesn't tie review to Goldman resignation letter.
Goldman Sachs, the investment bank blistered by a resigning employee this week for how it does business, said Friday that it will try to strengthen internal rules to prevent questions about conflicts of interest.
A U.S. judge almost killed a deal between two energy companies last month because Goldman had ties to both parties: The bank collected a fee for advising one company, and a Goldman banker owned stock in the other.
Goldman was stung Wednesday by an Op-Ed article published in The New York Times by a young banker who was quitting the company. The Goldman resignation letter accused the firm's executives of privately insulting clients and not acting in customers' best interest.
The bank did not offer specifics Friday on the review of its policies.
Goldman collected a fee for advising El Paso on the deal. The judge criticized Goldman for failing to disclose that one of its lead bankers on the team, Steve Daniel, personally owned $340,000 of Kinder Morgan stock.
Goldman had disclosed other conflicts: Its private-equity arm owned a stake in Kinder Morgan, and it controlled two seats on Kinder Morgan's board.
"We regret that El Paso's board wasn't aware," said David Wells, a spokesman at Goldman. "We are reviewing our policies and procedures with the goal of strengthening them."