Goldman Sachs Asset Management Unit Slapped With SEC Fine Over ESG Funds

  • Goldman Sachs Group Inc's GS asset-management arm agreed to pay $4 million to settle a regulatory investigation.
  • The Securities and Exchange Commission charged the Wall Street bank giant for policies and procedures failures involving two mutual funds and one separately managed account strategy marketed as Environmental, Social, and Governance (ESG) investments.
  • The SEC's order finds that between April 2017-February 2020, Goldman Sach's asset management unit had several failures in policies and procedures involving the ESG research that its investment teams used to select and monitor securities. 
  • Also see: Goldman Sachs Wants To Make Crypto Data Accessible To Institutions; It Will Unveil A New Data Service.
  • The company failed to have any written policies and procedures for ESG research in one product. Once policies and procedures were established, it failed to follow them consistently before February 2020. 
  • Goldman's compliance policy said investment analysts would use a questionnaire to screen investments before adding them to funds or other portfolios, but the forms weren't always completed before stocks were added, the SEC said.
  • Goldman neither admitted nor denied the SEC's allegations.
  • Price Action: GS shares closed at $383.87 on Tuesday.
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