top | item 4915920

(no title)

ahc | 13 years ago

Yes, there is always a chinese wall which separates the public and private sides of an investment bank.

discuss

order

aleyan|13 years ago

The wall you are talking about is between investment banking (private side) and the rest of the bank (public). The two sides don't see each other on the internal IMs systems, if they try emailing each other, their emails get auto routed to compliance, etc. This ensures that private insider information from M&A advising to the companies doesn't leak and get traded on.

In this case Goldman analysts and traders are both sitting on the public side of the wall. Neither analysts or traders know anything private about the companies that can't be found out or calculated without some sleuthing. Additionally under current regulations in the US, the analysts are required to release their research reports to their clients simultaneously( no client advantaged over another ).