By Julie Steinberg
HONG KONG--Hong Kong's securities regulator on Tuesday publicly censured an Asian unit of Goldman Sachs Group Inc. for misconduct while serving as a financial adviser to Hong Kong lender Wing Hang Bank Ltd. during its $5 billion buyout by Singapore's Oversea-Chinese Banking Corp.
The Securities and Futures Commission said Goldman's "conduct fell far short of the standards expected" of a financial adviser under the body's codes governing takeovers and mergers. The activities under scrutiny occurred between November 2013 and January 2014.
The censure is tantamount to a public rebuke of the company, and no fines or penalties were levied on Goldman.
Wing Hang Bank in November 2013 verbally engaged Goldman as a financial adviser to help with its potential sale, the SFC said. In that position, Goldman was supposed to disclose its dealings in "relevant securities" of Wing Hang Bank during the offer period, but it failed to do so for a certain period, the SFC said.
Goldman executed 111 trades in such securities between Nov. 8, 2013, and Jan. 6, 2014, and was supposed to have received permission from the SFC to carry out 26 of the trades, the SFC said.
Goldman also issued research materials covering Wing Hang Bank while acting as a financial adviser and without receiving permission from the SFC. The materials didn't comply with certain regulations under the takeover code, the SFC said.
The SFC noted that Goldman self-reported the breaches.
The misconduct stemmed from the failure of Goldman's investment-banking team to inform its compliance division of the start of an offer period for Wing Hang Bank in September 2013, the SFC said. Goldman has since issued reminders to the investment-banking team about proper policies and has also enhanced compliance procedures, the SFC said.
"We take compliance with our legal and regulatory obligations extremely seriously," a Goldman spokesman said. "Upon becoming aware of the issue we immediately reported the matter to the SFC and undertook necessary remedial measures. We have conducted our own thorough internal review of this issue and have implemented enhancements to our internal controls."
A spokesman for the SFC declined to comment beyond the news release announcing the censure.
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