Goldman fights the rumour mill

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The Independent Online
GOLDMAN Sachs yesterday formally denied reports that it has sacked staff and lost large amounts of money in its London operations, as the Securities and Futures Authority, the investment regulator, began inquiries about the source of the stories, writes John Willcock.

Goldman departed from its usual practice of refusing to comment on market speculation by issuing a statement.

'Contrary to market gossip, the firm has not suffered any significant trading losses, has not laid off personnel and is not being investigated by any regulatory authorities in London.' A spokesman said the company had been profitable for the trading year so far and was 'actively seeking to expand our headcount'.

Rumours started in New York on Thursday and rapidly spread to London, suggesting that Goldman's UK operation had made big losses in areas such as the German Eurobond market and various arbitrage activities.

There were also suggestions that the company had sacked traders in London.

The firm denied the rumours on Thursday after they affected prices in the futures market. It indicated that a number of customers had liquidated very large positions and this might have got the rumour mill going.

A spokesman for the SFA stressed that it was not carrying out any investigation into Goldman. Its job includes monitoring press coverage of member firms that might cause concern.

The SFA said it was discussing the rumours with Goldman but in no more than a routine, normal way.

'There is no investigation,' said the spokesman.

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