Goldman cornered on compliance
Following a probe by the Australian Securities and Investments Commission, the regulator has accepted an enforceable undertaking from Goldman Sachs Australia over the investment bank's communications with potential investors in the Healthscope capital markets deal.GS Australia has implemented changes to its controls and processes including to require, under ASIC orders, the following:• legal or compliance approval of all bookbuild messages to be provided to potential investors in certain equity capital market transactions; and• compliance attendance at any sales calls at the launch of certain equity capital market transactions to provide oversight of messaging to potential investors.Plus community benefit payment of $500,000 on Goldmans: peanuts."Following an investigation into the block trade transaction undertaken by GS Australia in relation to shares in Healthscope Limited on 23 November 2015, ASIC had concerns about certain representations made by GS Australia to potential investors about the minimum fixed demand," the regulator said yesterday."It seems", ASIC said, that some line manager at Goldmans told the equity sales team "that there were five corners for $500 million" on this block sale.Subordinates peddled this message, in some cases at a later point in time than when the key sales leads became aware "the level of expected demand … was not materialising."Offending Goldman staff were "unaware", ASIC said.ASIC found Goldman Sachs Australia ASIC in breach of the requirement to do all things necessary … efficiently, honestly and fairly. Secondly, ASIC have found GS Australia in breach of the requirement to do ensure staff are adequately trained and competent to provide these financial services.