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Legitimate concerns over conflict of interest that have resulted in overly extreme preventative policies are a central cause. It is time for all parties to revisit those policies and replace them with rules that recognize both true conflicts and true confluences of interest. Insight Center. Sponsored by Optum.
The other smoking gun is that Segarra pushed for a tough Fed line on Goldman’s lack of a substantive conflict of interest policy, and was rebuffed by her boss. That’s because, for the past two decades or so, not having a substantive conflict of interest policy has been Goldman’s business model.
Somehow, a theoretical assumption, widely used in a one cluster of academic specialties — economics, finance, econometric modeling, and the like — became transformed, primarily in the United States near the end of the 20th century, into a supreme decision principle.
For example, the SEC in 2010 had charged Goldman with misleading some of the parties to a billion dollar transaction (involving a complex derivative called a synthetic collateralized debt obligation), alleging specific facts about undisclosed conflicts of interest. Goldman settled within months for $550 million.
Securities and Exchange Commission introduced new rules in July 2023 to eliminate potential conflicts of interest in the algorithms used by these platforms. Still, regulators need to be careful not to stifle innovation while ensuring ethical practices in online trading. In response, the U.S.
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