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Market Currents

Wednesday, July 1, 2009
11:41 AM TweetThis
  • Zero Hedge digs up a weird disclaimer for Goldman (GS) clients using its 360 investing portal: "Your use of the products and services on this Web site may be monitored by GS, and the resultant information may be used by GS for its internal business purposes." Does that mean frontrunning?
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This news story has 7 comments:

  •  
    Of course it does. Trading firm have been doing this forever. Now its just automated, instead of brokers filing reports about what their clients were doing and why.
    2009 Jul 01 11:50 AM Reply
  •  
    Frontrunning is illegal--why would they announce they're engaging in it?
    2009 Jul 01 11:53 AM Reply
  •  
    Its great for clients who want GS to help them open positions. Moves the stock in the direction they want.
    2009 Jul 01 11:57 AM Reply
  •  
    They did not say they were frontrunning, they said they were going to use your data. They had to because of consumer protection laws. Now, you can bet than when asked, they will say they use the data for optimizing the business service or web site. And you can further bet that the SEC and DoJ will believe them, have lunch at GS's expense and retreat right back their cube and be happy. No more work necessary and never mind that the data is sitting in a common database with very few restrictions.

    On Jul 01 11:53 AM Varapanyo wrote:
    > Frontrunning is illegal--why would they announce they're engaging
    > in it?
    2009 Jul 01 11:59 AM Reply
  •  
    Brilliant! Good eye, Zero Hedge!
    2009 Jul 01 12:15 PM Reply
  •  
    They would still be be breaching their fiduciary duty--not that they wouldn't or haven't, but that disclaimer would not protect them.
    2009 Jul 01 12:17 PM Reply
  •  
    Not necessaily ... because it makes it move BEFORE they get in, because Goldman gets there first.

    It may help create momentum in the desired direction, but that's not guaranteed ... what's guaranteed, if Goldman really is frontrunning, is that the buyer DEFINITELY is forced to help Goldman profit by buying after Goldman, while Goldman's helping the buyer is only a POSSIBILITY if sustainable momentum is created.


    On Jul 01 11:57 AM j_remington wrote:

    > Its great for clients who want GS to help them open positions.
    > Moves the stock in the direction they want.
    2009 Jul 04 08:17 PM Reply
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