Goldman Sachs, an American investment banking firm, has revealed in its quarterly filings that the company was under investigation by US authorities for its hiring practices in Asia and high-frequency trading operations.
The inquiry was part of an ongoing probe by Securities and Exchange Commission (SEC) and the Department of Justice to check whether the banks have recruited sons and daughters of government officials in Asia for any deal advisory and underwriting work, according to Financial Times.
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The US Foreign Corrupt Practices Act abstains American firms from indulging in such processes which could see potential corruption charges.
JPMorgan Chase was said to be the prime target for the US authorities after several of its employees departed in the wake of the investigation, the news agency reported citing people familiar with the developments.
New York’s attorney-general Eric Schneiderman has issued a written order to banks, exchanges and high-frequency trading companies to investigate any unfair advantage some firms might have over others.
Schneiderman has cited few issues such as high-speed traders placing their computer servers inside trading venues to cut down the time it takes for the transfer of prices and other trading information and the high-frequency traders gaining access to extra bandwidth to speed up the information flow.
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By GlobalDataGoldman also posted legal losses worth $3.7bn above existing reserves, as compared to losses of $3.6bn in the previous quarter.
Earlier in 2010, the bank had paid $550m to the SEC to resolve fraud charges in selling a collateralised debt obligation against it.
