Goldman Sachs Group Inc (NYSE:GS), an investment adviser, has reviewed its policies to bar bankers from trading in individual shares and bonds. Citing conflict of interest, the company further said that bankers aren’t allowed to trade in “activist or event-driven hedge funds”.
Before the new rules took effect, bankers only needed approval to invest in individual stocks.
The move by Goldman Sachs Group Inc (NYSE:GS) comes after a banking secret investigator, Carmen Segarra, who is a Harvard trained lawyer, released tapes showing how a culture that favor bankers is deeply rooted in Wall Street since the very institutions that are charged with regulating their activities fear to upset them. The tapes reveal how these regulators work jointly with the banks to allow deals go through without giving much thought to the law.
“What I was sort of seeing and experiencing was this level of deference to the banks, this level of fear,”
Segarra said.
Segarra had last year sued the New York Fed for allegedly firing her in 2012 for refusal to change her findings that revealed that Goldman Sachs Group Inc (NYSE:GS) didn’t have a conflict of interest policy to guard its activities. The case was however thrown out, although she chose to make an appeal.
The New York Fed has rejected such allegations as baseless.
“The New York Fed works diligently to execute its supervisory authority in a manner that is most effective in promoting the safety and soundness of the financial institutions it is charged with supervising,”
a statement on its website reads.
The tapes released by Segarra contain 46 hours worth of recordings that give secret information about meetings and conversations that implicate Goldman Sachs Group Inc (NYSE:GS) and other institutions. She made the recordings during her tenure at the New York Federal Reserve where she was hired in 2011 as part of a team assigned by the agency to overhaul how banking system was regulated after the 2008 financial meltdown.
This article has been written by Victor Ochieng.
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