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Reports US

US stock market daily report (May 09, 2014, Friday)

May 11, 2014, Sunday, 16:05 GMT | 11:05 EST | 20:35 IST | 23:05 SGT
Contributed by Millennium Traders


Goldman Sachs Group, Inc. (GS-NYSE) faces a list of reviews from the Securities and Exchange Commission, the U.S. Justice Department, the Federal Bureau of Investigation and New York Attorney General Eric Schneiderman. Goldman is being reviewed and under scrutiny by government agencies and industry regulators for their role that high-speed traders play in the stock market. According to a quarterly filing with the SEC on Friday, Goldman is under investigation for inquiries related to high-frequency trading and whether the firms hiring practices comply with U.S. anti-bribery laws. According to the filing, regulators are examining whether Goldman's hiring methods are in compliance with the U.S. Foreign Corrupt Practices Act.

Also in the SEC filing, Goldman reported that they are a defendant in a class-action lawsuit filed in mid-April in the City of Providence, Rhode Island, related to high-speed trading. The suit announced on April 18 alleges that a number of exchanges and securities firms, including Goldman Sachs Group, violated market-manipulation and insider-trading rules. The complaint mentions Goldman's 'dark pool' Electronic Trading [GSET] program SIGMA X. The future of SIGMA X is gloomy as discussions include those to shut it down.

Earlier this week, the SEC reported an expansion of a probe into large banks' hiring practices in Asia. The action includes a move for more information from at least five firms, including Goldman.

Goldman increased the top end of its range of "reasonably possible" legal losses to $3.7 billion which is higher that current reserves, per the SEC filing.

Large investors have a tendency to want banks to offer 'dark pools' since it includes anonymity as well as lower trading costs. Schneiderman's office is seeking complete details as to whether high-speed trading firms have secret arrangements with stock exchanges or other trading venues such as dark pools, that give them the ability to trade ahead of other investors.

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