Goldman Sachs has agreed to pay the U.S. Securities and Commission $4 million to resolve claims that the company’s past procedures and policies on environmental, social and governance investments were not in compliance, the SEC announced Tuesday.
Photo Credit: Shutterstock
The agency alleged that Goldman had several policy and procedural failures involving the ESG research used by its investment teams to select and analyze securities for two mutual funds and a third product marketed as ESG investments. Those failures include not having any written documentation for said policies and procedures for one of the products from April 2017 to June 2018. The SEC claims that once those were established, the company failed to consistently follow them until early 2020.
One instance of these failures was Goldman’s order to employees to complete a questionnaire for each and every company it planned to include in each product’s investment portfolio before its selection, but it was found that many employees actually completed these after securities were already selected, the SEC said.
“GSAM shared information about its policies and procedures, which it failed to follow consistently, with third parties, including intermediaries and the funds’ board of trustees,” the SEC stated.
According to the order, Goldman Sachs submitted the offer of settlement in anticipation of proceedings, and the commission agreed to accept the terms.
Goldman Sachs said in its statement that it is pleased to have resolved the matter, which it said related to three of the Goldman Sachs Asset Management Fundamental Equity group’s investment portfolios.
“These historical matters did not materially impact the investments’ satisfaction of the ESG criteria contained in those policies and procedures,” Goldman Sachs claimed. “This matter related to the Goldman Sachs ESG Emerging Markets Equity Fund, Goldman Sachs International Equity ESG Fund and a US Equity ESG separately-managed account strategy.”
The company noted that it has always been “committed to its pursuit of best practices across its portfolios.”
Also on Tuesday, the U.K.’s Financial Conduct Authority announced the formation of a task force developing a code of conduct for ESG data and ratings providers in an effort to better address reliability and transparency concerns across global capital markets.
Read more articles from Haute Lawyer, visit https://hauteliving.com/hautelawyer
Source: https://www.law360.com/articles/1552059
