Goldman Denies Insider Trading

10 years ago

Goldman Sachs Chairman Henry Paulson has stated that there is 'no basis' for the Securities and Exchange Commission (SEC) to charge the firm with insider dealing in respect to unusual trading activities undertaken immediately prior to the US Treasury announcement that it was eliminating the 30 year bond on October 31st last year.

The SEC informed Goldman last week that it may pursue a case against it.

There is still a lot of confusion over the story and a Goldman spokesperson has already confirmed that the securities firm did not profit in any way from its prior knowledge of the US Treasury's intentions. In any case, it appears that the Treasury's secret was not very well kept and it has been suggested that staff from several securities firms were in the know about federal intentions.

An independent consultant, Peter Davis, is believed to have informed Goldman staff of the Treasury's plan to stop selling the 30 year bond on October 31st and the bonds had their biggest gain for 14 years that day.

If there is a smoking gun in this case, it remains to be uncovered. Experts believe that there has never been an insider dealing case involving Treasury securities.

LEAD BUSINESS STORY: 'Old Traders' - Chapters I - VIII

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