From the SEC on Thursday:
The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange Act”) against Goldman, Sachs & Co. (“Respondent” or “Goldman”).
The cease-and-desist notice relates to Goldman’s past tendency to distribute hot new research via private ‘huddles’ — first with Goldman’s own traders, then preferred clients, and last everyone else. Turns out the bank even had a cool acronym to describe the service: ASI, or “asymmetric service initiative”.
You can just imagine the defence.
“No, Guv’nor, it wasn’t front-running, it’s what we in the trade call your basic asymmetric service initiative. You know, twin alloys an’ a cuddle an’ a kiss. Lovely jubbly. We’ll be on our way…”
Though other authorities have taken Goldman Sachs to task on the matter since then.
In any case, it’s interesting to see what three years worth of advance warning at the SEC has managed to germinate in terms of charges:
You can read all about it here.
Though, don’t forget to feel comforted by the fact that the ASI programme was fully suspended by Goldman Sachs in 2011 (and presumably never replaced with anything more subtle, like, say, secret markings, winks, nudges or any other forms of covert signalling to top clients. Cause obviously that would have been stupid.)