Goldman Huddles Draw Subpoenas

Goldman Sachs’ weekly huddles have Massachusetts’ top securities regulator more than a little concerned.

William Galvin, secretary of the Commonwealth, is so concerned about the meetings between the bank’s top analysts and traders that he’s issued subpoenas calling on Goldman officials to explain themselves. He’s worried that some clients of the bank are getting preferential treatment through the meetings.

"We thought we solved this problem with the preferred customers years ago when we settled with Goldman Sachs on Wall Street research, but now we don't know," Galvin told Reuters. Galvin wants documents related to the meetings, the Wall Street Journal reports.

Every week, the bank’s analysts meet with traders to pass on their latest ideas. The meetings are called “huddles,” and Galvin is worried that they’re used to give short-term trading tips to preferred Goldman clients.

The Financial Industry Regulatory Authority, the self-regulating body for financial firms, is also looking into the Goldman huddles, the Wall Street Journal reports.

Critics worry that the short-term information shared by analysts at the huddles sometimes differs from their long-term outlooks, and that only a few clients are getting the benefit of the information.

The Journal reports that Goldman has internally discussed putting what’s said during the huddles on the firm’s website. Then everything would be out in the open.