Goldman Sachs deal with ASIC to keep lawyers busy
Financial Services July 2, 2018 11:58 pm By Cat Fredenburgh | Melbourne

Goldman Sachs has agreed to involve more lawyers in its capital markets transactions communications, after the Australian Securities and Investments Commission raised concerns about representations made during a Healthscope block trade managed by the US investment bank.

As part a court enforceable undertaking entered with ASIC, Goldman now requires lawyers and compliance officers to be more actively involving in reviewing its messaging during capital markets transactions.

Legal sign off is now required for bookbuild messaging to prospective investors in certain equity capital market transactions, and a compliance officer’s attendance is needed at any sales calls at the launch of certain equity capital market transactions, ASIC said.

Goldman also agreed to make a $500,000 community payment and improve internal controls.

The investment bank agreed to the undertaking rather than face a civil or administrative action by ASIC, the regulator said.

“This court enforceable undertaking reinforces our focus on intermediary conduct and standards in capital raising transactions. Investors need to have confidence that they are being provided with accurate information in the course of a bookbuild or underwriting process,” ASIC Commissioner Cathie Armour said.

The corporate regulator’s concerns centred on representations made by Goldman Sachs about the minimum fixed demand when managing a 2015 block trade in hospital group Healthscope.

Goldman will also conduct an internal review of its policies and training of employees for equity capital markets transactions it serves as lead manager on, including when its takes on bookbuilding and underwriting roles, and take action to address any deficiencies it finds, ASIC said.

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Cat Fredenburgh

Cat Fredenburgh has been covering legal news for 12 years. She was previously Editor-in-Chief at US legal news publication Law360. She is the Co-Founder of Lawyerly.