Under fire from many a corner, Goldman Sachs is looking to change some of its practices in dealing with institutional clients, a move that could help the troubled Wall Street giant to settle charges slapped by the American market watchdog, says a media report.
The US Securities and Exchange Commission has charged Goldman Sachs with fraud and causing losses of over $1 billion to investors by misrepresenting facts about a financial product tied to sub-prime mortgages. And Friday, the regulator had launched criminal proceedings against the once mighty investment bank.
The Financial Times has reported that Goldman Sachs is planning to change some of its practices in dealing with institutional clients, a step that could help the entity settle the charges filed by the SEC.
According to the report, the internal policy revisions come as the SEC steps up demands for corporate governance changes as part of any negotiated settlement.
"While talks are not under way to resolve the SEC's allegations that Goldman Sachs misled investors during the financial crisis over the sale of mortgage-backed securities, people familiar with each side of the dispute concede a settlement would be in the best interests of the both parties," the daily noted.
Quoting a person familiar with Goldman's plans, the report said the Wall Street major "would now tell employees to seek confirmation from clients that they understand the risks associated with any given security, and how their dealings with Goldman may change their total exposure".
The paper noted that Goldman is also studying ways to ensure that complicated securities are marketed only to appropriate clients.
