Followers | 680 |
Posts | 141120 |
Boards Moderated | 36 |
Alias Born | 03/10/2004 |
Monday, April 12, 2021 3:20:25 PM
By: Elizabeth Dilts Marshall | April 12, 2021
NEW YORK (Reuters) - Goldman Sachs Group Inc (NYSE:GS) executives are examining how well the bank navigated several major market events this year that caused extreme volatility, people familiar with the matter told Reuters.
The review will include a market-wide fire sale of stocks triggered by Archegos Capital Management's default on margin calls at banks including Goldman, the sources said.
The meltdown of Archegos, a New York investment fund run by former Tiger Asia manager Bill Hwang, has sent shock waves across Wall Street and drawn regulatory scrutiny in three continents.
Goldman Sachs is also looking more broadly at how it handled recent market events, with a particular lens on compliance and best practices, the sources said.
That could include what happened during the Reddit-fueled trading frenzy in equity markets, including shares of GameStop Corp (NYSE:GME), as well as the U.S. Federal Reserve's decision to end pandemic-related capital relief for banks, which caused issues in fixed-income markets. Also this year, there was chaos in energy markets in mid-February after a deep freeze in Texas sent the cost of fuel and power sky-high.
Goldman Sachs declined to comment.
Although Goldman did not earn or lose a significant amount of money on Archegos' default and its CEO has said the bank's controls worked well, the surge of volatility across several markets this year prompted management to take a closer look at its risks and hedges, the sources said.
Reviews of this nature are routine at large Wall Street banks, especially when they face scrutiny from regulators and politicians. The GameStop and Archegos events have prompted financial regulators to say they are taking a closer look at what caused the volatility.
The Fed considers it a "risk-management breakdown" at firms that handled Archegos' trades, Chairman Jerome Powell told CBS's "60 Minutes", https://www.cbsnews.com/news/federal-reserve-jerome-powell-60-minutes-2021-04-11 which aired on Sunday, pledging that the regulator will not let it happen again.
Goldman's chief executive, David Solomon, said last week that the bank's risk controls on Archegos "worked well."
As part of its review, the bank's compliance department examined its decision to begin doing business with Archegos in late 2020 and noted it required the family office to increase the collateral it was required to post early this year, one of the sources said.
That helped Goldman avoid losses on positions that rivals including Japanese bank Nomura Holdings (NYSE:NMR) Inc and Switzerland's Credit Suisse (SIX:CSGN) Group AG are now facing.
Goldman and several banks avoided doing business with Archegos in its early days because Hwang's prior firm reached a $44 million insider trading settlement with the U.S. Securities and Exchange Commission in 2012. They warmed up to the client last year after enough time had passed and it was clear that rivals were doing business with Hwang again.
However, Archegos had six prime brokers handling its trades, with different levels of leverage and margin requirements on a handful of concentrated bets. When some of its positions went belly-up in late March, the banks had to seize collateral and sold billions of dollars' worth of stock to cover Archegos' positions.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
Recent GS News
- Tesla’s April Sales Down 18% in China, Amazon’s Multi-Billion Dollar Cloud Expansion in Singapore, and More News • IH Market News • 05/07/2024 11:44:00 AM
- Perficient Stock Soars 52.9% Post-Acquisition; Luminar Declines 10% Amid Workforce Cutbacks, and Other News • IH Market News • 05/06/2024 12:09:00 PM
- Transcendia Announces Significant New Capital Investment to Support Next Phase of Growth and Value Creation Initiatives • PR Newswire (US) • 05/02/2024 04:00:00 PM
- Alphabet CEO’s Billion-Dollar Wealth, Microsoft’s $1.7B Indonesia Investment, and More News • IH Market News • 04/30/2024 11:58:40 AM
- BHP Bids $38.8 Billion for Anglo American; Biden Unveils Historic Micron Technology Deal, and More News • IH Market News • 04/25/2024 11:48:40 AM
- Paramount’s Shares Surge Following Sony and Apollo’s Joint Bid; ISS Backs Berkshire Hathaway Director Re-election, and More • IH Market News • 04/19/2024 11:31:22 AM
- Tether’s Division Restructure, Aptos-Microsoft DeFi Collaboration, and More Crypto News • IH Market News • 04/18/2024 05:59:13 PM
- Apple to Invest $250 Million in Singapore Expansion, Oracle Commits $8 Billion to Japan Infrastructure, and More News • IH Market News • 04/18/2024 11:11:52 AM
- Analysts Sound Alarm on Fourth BTC Halving, Kraken Wallet Launch, and More Crypto News • IH Market News • 04/17/2024 05:45:22 PM
- United Shares Surge 5.3% in Q1 2024 Earnings Beat; Take-Two Cuts 5% of Workforce, and More News • IH Market News • 04/17/2024 10:57:39 AM
- Dow Looks To Snap Six-Day Losing Streak As UnitedHealth Surges • IH Market News • 04/16/2024 01:09:47 PM
- U.S. Index Futures Signal Mixed Trading, Oil Prices Dip • IH Market News • 04/16/2024 11:19:33 AM
- U.S. Stocks Extend Sell-Off As Treasury Yields Surge After Retail Sales Data • IH Market News • 04/15/2024 08:38:32 PM
- Goldman Sachs’ Q1 net revenue totals $14.21B • IH Market News • 04/15/2024 06:36:16 PM
- Upbeat Earnings, Retail Sales Data May Generate Buying Interest • IH Market News • 04/15/2024 01:10:16 PM
- U.S. Index Futures Surge after Dow Jones’ Worst Week, Oil Prices Dip • IH Market News • 04/15/2024 11:08:21 AM
- Paramount Global Board Shrinks, Morgan Stanley Faces Regulatory Probe, and More News • IH Market News • 04/12/2024 11:05:29 AM
- Costco Increases Dividend by 14%, Meta Introduces ‘Artemis’ AI Chip, and More News • IH Market News • 04/11/2024 11:24:54 AM
- Delta Generates US$37 Million Profit in Q1, Google and Intel Unveil Cutting-Edge AI Chips, and More News • IH Market News • 04/10/2024 11:13:48 AM
- Tesla Resolves Autopilot Lawsuit, JPMorgan Unveils Potential CEO Successors, and More • IH Market News • 04/09/2024 10:39:30 AM
- Crypto: Morgan Stanley and UBS Compete for Leadership in Bitcoin ETFs, Risks in Ethena’s USDe Strategy, and More • IH Market News • 04/05/2024 06:15:55 PM
- Apple Terminates 614 Employees, Disney Unveils June Crackdown on Password Sharing, and More Updates • IH Market News • 04/05/2024 11:38:57 AM
- Exxon Mobil Forecasts Earnings Decline, Twilio Seeks Board Tenure Changes, and More News • IH Market News • 04/04/2024 11:30:20 AM
- Crypto: Paradigm Seeks Investment for New Web3 Fund, KBW Initiates Cautious Coverage on Robinhood, and Other Updates • IH Market News • 04/03/2024 02:21:12 PM
- Cal-Maine Surges on Strong Quarterly Performance, Taiwan Earthquake Disrupts Tech Supply Chain, and More • IH Market News • 04/03/2024 11:12:20 AM
FEATURED Cannabix Technologies Launches New Compact Breath Logix Workplace Series and Prepares for Delivery to South Africa • May 7, 2024 8:51 AM
Moon Equity Holdings, Corp. Announces Acquisition of Wikolo, Inc. • MONI • May 7, 2024 9:48 AM
NanoViricides Reports that the Phase I NV-387 Clinical Trial is Completed Successfully and Data Lock is Expected Soon • NNVC • May 2, 2024 10:07 AM
ILUS Files Form 10-K and Provides Shareholder Update • ILUS • May 2, 2024 8:52 AM
Avant Technologies Names New CEO Following Acquisition of Healthcare Technology and Data Integration Firm • AVAI • May 2, 2024 8:00 AM
Bantec Engaged in a Letter of Intent to Acquire a Small New Jersey Based Manufacturing Company • BANT • May 1, 2024 10:00 AM