Those nasty rumors about Goldman Sachs playing favorites and shorting its own clients by shorting the investment products it encourages them to buy reportedly have turned out to be true.
At least, that’s what a senior Goldman executive said in an e-mail he sent to clients, The Business Insider reports.
The e-mail warned that the huge investment bank may have shared investment ideas with the firm's proprietary trading group or some of its clients before sharing those ideas with others.
It also said that Goldman may trade ahead of disclosing those ideas to clients, and may trade out of positions or change its mind about the ideas without letting clients know.
Andrew Ross Sorkin, financial reporter for The New York Times, obtained a copy of the email, which noted that the firm’s clients “should not consider Trading Ideas as objective or independent research or as investment advice."
“When we discuss Trading Ideas with you, we will not be acting as your advisor (including, without limitation, in relation to investment, accounting, tax or legal matters) and the provision of Trading Ideas to you will not give rise to any fiduciary or equitable duties on our part,” the memo continued.
“We will not be soliciting any action based on Trading Ideas and it is your responsibility to seek appropriate advice.”
The New York Times also reports that as it prepares to pay out big bonuses to employees, Goldman Sachs is considering expanding a program that would require executives and top managers to give a certain percentage of their earnings to charity.
Nine hundred and fifty-three Goldman employees received compensation of more than $1 million each last year. The average annual income of Goldman Sachs employees is reported to be $595,000.
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