Hong Kong’s securities regulator has publicly censured an Asian unit of Goldman Sachs Group Inc. for misconduct, The Wall Street Journal reported.
The Securities and Futures Commission said Goldman’s conduct while serving as a financial adviser to Hong Kong lender Wing Hang Bank Ltd. during its US$5 billion buyout by Singapore’s Oversea-Chinese Banking Corp. “fell far short of the standards expected” of a financial adviser under the SFC’s codes governing takeovers and mergers.
The censure amounts to a public rebuke of Goldman, and no fines or penalties were levied.
Wing Hang Bank verbally engaged Goldman in November 2013 as a financial adviser to help with its potential sale, the SFC said.
In that position, Goldman was supposed to disclose its dealings in “relevant securities” of the bank during the offer period, but it failed to do so for a certain period, the regulator said.
Goldman executed 111 trades in such securities between Nov. 8, 2013, and Jan. 6, 2014, and was supposed to have obtained SFC permission to carry out 26 of the trades, the SFC said.
The Wall Street bank also issued research materials covering Wing Hang Bank while acting as a financial adviser and without receiving permission from the SFC.
The materials didn’t comply with certain regulations under the takeover code, the regulator said.
The SFC noted that Goldman itself reported the breaches.
The misconduct stemmed from the failure of Goldman’s investment banking team to inform its compliance division of the start of an offer period for Wing Hang Bank in September 2013, the SFC said.
Goldman has since issued reminders to the investment banking team about proper policies and has also enhanced compliance procedures, the regulator said.
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