Goldman tightens conflict-of-interest rules as scrutiny mounts
(Reuters) - Goldman Sachs Group Inc has tightened rules on investments its bankers can make in individual stocks and bonds, a company spokesman said on Friday, as a U.S. Senator called for hearings into the Wall Street bank's conflict-of-interest policies.
Goldman's decision, announced internally on Friday, also bars bankers from investing in activist or event-driven hedge funds, Andrew Williams, a Goldman Sachs spokesman, told Reuters. The rule will be effective immediately, he said.
Separately on Friday, U.S. Senator Elizabeth Warren, a Democrat on the banking committee, called for hearings into issues raised by secretly taped conversations between Federal Reserve supervisors and Goldman officials.
Carmen Segarra, a former New York Fed bank examiner who recorded the conversations, brought a wrongful termination lawsuit against her former employer last year alleging that she was fired due to her refusal to change her findings that Goldman Sachs had no companywide conflict of interest policy.
Her suit was dismissed in April for failing to state a claim that merited whistleblower protection, a decision she is appealing.
According to the complaint, Segarra's review included the roughly $23 billion takeover of pipeline company El Paso Corp by Kinder Morgan Inc. Goldman advised El Paso on the 2012 merger despite holding a big stake in Kinder Morgan.
(Reporting by Amrutha Gayathri in Bangalore; Editing by David Gregorio)
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