For $10M, Goldman makes suit go away

Have checkbook, will settle.

For the third time in 11 months, Goldman Sachs has settled charges brought by a regulator by writing a check.

In the latest example, the Wall Street bank paid $10 million to get rid of a suit brought by Massachusetts’s chief securities regulator that accused the firm of favoring its largest customers over smaller ones. Goldman displayed the favoritism by having its analysts discuss trading ideas with select clients in regularly scheduled “huddles.”

Goldman closed out the two-year probe by William Galvin, the secretary of the commonwealth, by paying the fine and promising to halt huddles.

Goldman was fined the equivalent of $27 million late last year by the London-based regulatory body Financial Services Authority for allegations of misconduct.

At the trading powwows, Goldman analysts would discuss with traders at the firm stocks they thought would see short-term volatility. Some of the Goldman analysts’ views during such meetings would differ markedly from recommendations they offered in research reports.

A 2009 article by the Wall Street Journal sparked Massachusetts’s probe into the trading huddles.

Galvin’s investigation found that Goldman “engaged in dishonorable or dishonest conduct” but did not find that the firm committed “fraud.”

Internally, Goldman argues that it only treated its own clients differently because certain clients are viewed as higher-tiered and therefore are afforded a better level of service by the platinum-encrusted investment bank.

Last July, Goldman settled fraud charges brought by the Securities and Exchange Commission by paying a $550 million fine.

Goldman also is awaiting probes into the trading huddles by the Financial Industry Regulatory Authority and the SEC.