Goldman Sachs (GS) Plans To Change Practices In Dealing With Institutional Clients

Goldman Sachs (NYSE: GS), through its internal policy revisions, plans to change some of its practices in dealing with institutional clients. These internal policy revisions come as pressure from the Securities and Exchange Commission (SEC) mounts on the bank. According to the Financial Times, the SEC is demanding changes in the bank's corporate governance. People familiar with both sides of the dispute say that the SEC and Goldman are trying to reach a settlement that would be in the interest of both parties. According to a person familiar with Goldman's plans, henceforth, the bank would tell its employees to seek confirmation from its clients that they understand the risk associated with any given security and how their dealings with Goldman may change their risk exposure. Meanwhile, the bank is also identifying ways through which highly complicated securities are marketed only to appropriate clients, said the person. Amid mounting scrutiny, Goldman is now "tightening up” its standards. Since the SEC made its allegation, the bank's shares have also nosedived. They lost more than a fifth of their value after the SEC alleged the bank committed a fraud. Posted in: Internal Fraud