Tags: Goldman | Sachs | Prop | Trading | volcker

Report: Goldman Sachs Plans to Spin Off Prop Trading

Wednesday, 04 Aug 2010 02:41 PM

Goldman Sachs Group Inc. plans to spin off its proprietary trading business as early as this month to comply with the so-called Volcker rule, CNBC reported on Wednesday.

It would be the first move by the New York-based investment bank to adapt its business to comply with the U.S. financial reform package signed into law last month.

One analyst said such a move would be a positive for the bank, and Goldman shares climbed 1.7 percent to $155.77 in early-afternoon trading.

"It gets them out of the way of the Volcker rule without causing any deterioration in their earnings. Therefore it's a significant positive," said Dick Bove, analyst at Rochdale Securities.

A Goldman spokesman was not immediately available for comment.

Under the Volcker rule, named for former Federal Reserve Chairman Paul Volcker, banks are restricted from proprietary trading and have new limits on the size of private equity or hedge fund investments. Proprietary trading has been a key source of Wall Street investment bank profits.

The rule was a key, and sometimes contentious, provision in the financial reform legislation.

In recent months, Goldman has been a focal point for critics of the financial sector's ills leading into the 2008 crisis.

On July 16, Goldman paid $550 million to settle U.S. Securities and Exchange Commission civil fraud charges over how it marketed a subprime mortgage product to institutional investors.

© 2017 Thomson/Reuters. All rights reserved.

   
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Goldman Sachs Group Inc. plans to spin off its proprietary trading business as early as this month to comply with the so-called Volcker rule, CNBC reported on Wednesday. It would be the first move by the New York-based investment bank to adapt its business to comply with...
Goldman,Sachs,Prop,Trading,volcker
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2010-41-04
Wednesday, 04 Aug 2010 02:41 PM
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