FINRA Initiates Probe Into Goldman's "Trading Huddle" And Comparable Practices By Other Wall Street Firms

Tyler Durden's picture

Could it be that the regulators are finally set on doing the one thing they are paid to do, i.e. regulatoring? Perhaps, especially when they are presented with all the data on a silver platter, as the WSJ did some time ago. The same WSJ reports that FINRA has now started a probe into the practice known as "trading huddles" which is merely another phrase for providing the best, most actionable data to one's preferential clients, and also a very politically correct and polite way of allegedly endorsing front-running.

The industry-funded regulator of securities firms doing business in the U.S. recently sought information from Citigroup Inc., J.P. Morgan Chase & Co. Morgan Stanley
and other firms, including details of any meetings where unpublished
research opinions or trading ideas were disclosed to nonresearch
employees or clients.

The probe follows an article in The Wall Street Journal in August about gatherings at Goldman Sachs Group
Inc. known inside the company as "trading huddles." During the
meetings, Goldman analysts gave short-term tips to traders, followed by
big clients. The tips sometimes differed from Goldman's long-term
research...While large clients routinely get extra attention and service, Finra
officials want to determine if the gatherings give an unfair advantage
to certain customers.

Goldman, however, is not the only firm involved as this has long been a pervasive practice throughout the major brokerages:

Finra's examination of the trading huddles at Goldman was expanded last
month to include about 10 other firms,
according to people familiar
with the situation. Responses were due earlier this month.

Surprisingly, this could end up being more than just more posturing by Mary Schapiro's former firm:

In its letter to securities firms, Finra asked for lists of all
meetings held since July 2008 where "any non-published research opinion
and/or information … regarding a company under research coverage by the
Firm was disclosed … to non-research personnel or current or potential
customers of the firm."

The information requested by Finra includes dates and minutes of
meetings, names of attendees and the names of clients who might have
received the information.

When FINRA is done with the trading huddle, it should consider evaluating the "impact" of expert networks, another topic Zero Hedge has written about extensively in the past (here, here and here)

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Anonymous's picture

I can almost hear the symphony of Outlook calendar entries and Blackberry messages being deleted in unison...

Sqworl's picture


Fraud Infested Night Rat Assc

This is as bad as Bam publicly scorn of Banksters...They just foching don't get it!!!!

Chopshop's picture

don't snicker too much cause in next leg down of this ginormous bear the ol regulators might just wake up and pick up where patty yuck-yuck / hannibal byrne left off about a year ago before the world woke up and demanded an end to evil short sellers. lol.

outside of GSCO, which ain't getting nuttin done to it, don't sleep on folks who can and will try to capitalize off of violent xenophobia and hapless sheeple.  ya know, like glenn brain-dead stooge beck, dennis paperboy kneale and charlie "i'm hearing rumours from a friend of a mutual acquaintance of another friend that a neighbor of a very good friend knows, who thinks that he overheard someone's friend talking about **ittygroup in a bathroom stall last week ..." gasparino. 

almost feel bad about picking on people who ride the little yellow bus like beck n kneale, except for the fact that they present every personal opinion as being fact and rely on absolute nonsense to prey upon people who actually did ride on little yellow buses.

as for chuckie, who practices what i like to call 'hack-a-shaq-'journalism' where he parses down rumours heard to fox-like question statements such as:

'xyz said that they overhead abc saying that lmno told p that blah blah ... what do you think.'

colbert has crushed folks like this for their pathetic tactic of making crap up and/OR embellishing personal opinion without any merit or basis in fact.


... ' scrooge mcduck was overhead saying that that sky is purple now. i didn't say it or come up with it, so hey, can't blame me, i'm just "reporting" ... someone else, whom i, um, totally trust, told me in confidence a bunch of gossip and since i'm paid to have something to "report" on which is appropriately salacious while still allowing me to hit 4 octave modulation on bilabials alone when ordering coffee at starbucks ... '

MSM is so pathetic. about as hollow as the script for Hollow Man duece was and about as shallow as a dixie cup.  broker-dealers ain't exactly tickled pink but at least we all can be thankful for tyler, marla and all who make ZH tick on the reg.

VLee's picture

I think I'd rather believe ACORN with their findings from their internal audit than FINRA with their investigation of GS and crew.

Sqworl's picture

I completely agree...the video would show Finra showing Banksters how to perform fraud and financial prostitution..lmao

Anonymous's picture

The big FU to you FINRA and all other agencies. I will never "invest" in your bullshit again.

Too late for me.

I will trade as a gambler only.

geopol's picture

FINRA,,,Let's not rush into this,,,,The whole system is a ponzi,,,

Cistercian's picture

 Yes...justice is coming with the pell mell speed of a glacier.The regulatory agencies are really, really on their game.Not.

Anonymous's picture

Id like some fries and a shake to go with that Nothingburger

Cognitive Dissonance's picture

When my children were barely two years old, for the Easter egg hunt, I would "direct" them to where the eggs were hidden and then "help" them find them, always making sure I praised them loudly for being so smart when they did "find" the eggs.

Is this what FINRA is now, the 2 year old being led to the eggs?

Sqworl's picture by your local securities industry association and puppet master Rick Can't

MsCreant's picture

Who junked this fine comment? The only reason I might not laugh is because it is way too true.

Hey FINRA? Reading the ZH Comments again? That one must have touched a nerve...

More help:

Trading huddle = Circle jerk = Pump and dump

Anonymous's picture

internet poker anyone?

Thurgy's picture

Very nice post, Tyler.