[Infowarrior] - Goldman caught front-running

[Richard Forno]

(Yet another reason why analysis/calls/'recommendations' from brokers  
should be avoided for serious trading.  If you want to read 'analysis'  
from brokers - which is always helpful food for thought - ask to see  
their advice to "institutional" investors instead....and don't be  
surprised if they are telling institutions to sell something while  
telling retail investors to buy the same thing.  For more info, check  
out McClellan's "Full of Bull" from Amazon. -rick)


Goldman Acknowledges Conflicts With Clients
January 12, 2010, 11:30 am
http://dealbook.blogs.nytimes.com/2010/01/12/goldman-executive-discloses-conflicts-policy/?
A senior Goldman Sachs executive sent an e-mail message to clients on  
Tuesday disclosing that the firm’s Fundamental Strategies Group might  
have shared investment ideas with the firm’s proprietary trading group  
or some clients before sharing them with others.

The e-mail message, obtained by DealBook, demonstrates the various  
conflicts that Goldman and other firms face in balancing the interests  
of its various clients and its own trading operation. (Read it after  
the jump.)

“We may trade, and may have existing positions, based on trading ideas  
before we have discussed those trading ideas with you,” Thomas  
Mazarakis, head of Goldman’s Fundamental Strategies Group, wrote.

The message was meant to clarify the firm’s conflict-of-interest  
policy. Goldman and other firms have come under criticism for trading  
ahead of, or at odds, with its own clients. In one such situation,  
raised in my column on Tuesday, Goldman created and sold bundles of  
mortgages known as collateralized debt obligations while at the same  
time selling them short.

Lucas Van Praag, a Goldman spokesman, declined to comment.

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http://dealbook.blogs.nytimes.com/2010/01/12/goldman-executive-discloses-conflicts-policy/