Goldman, the world's third largest securities firm, is believed to be the first company ever to be investigated for insider trading in a case relating to bonds.
It appears that the firm was advised by a consultant that the US Treasury would stop selling 30-year bonds on October 31st last year. The consultant, Pete Davis, briefed a number of clients before the US Treasury advised the market proper.
The Treasury market rallied immediately prior to the announcement and the 30 year bond had its biggest one-day gain in 14 years.
The SEC have been investigating the price movements since October.
Goldman has cooperated fully with the enquiry and denies that it profited in any way because of the advance warning.
Pete Davis is also thought to have been questioned by federal regulators.
Goldman In Insider Trading Probe
The Securities and Exchange Commission has notified Goldman Sachs that enforcement staff are looking at bringing a case against it for trading Treasury bonds on inside information.
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