Goldman Sachs to review rules for conflict of interest

A Delaware judge almost killed a deal between two energy companies last month because Goldman had ties to both parties: The bank collected a fee for advising one company, and a Goldman banker owned stock in the other.

Goldman was stung Wednesday by an Op-Ed article published in The New York Times by a young banker who was quitting the company.

The banker accused Goldman executives of privately insulting clients and not acting in customers' best interest.

The bank did not offer specifics Friday on the review of its policies.

The energy deal was a $21 billion buyout of El Paso, a Houston natural gas and oil company, by Kinder Morgan, a Houston natural gas pipeline company. The judge ultimate allowed the deal.

Goldman collected a fee for advising El Paso on the deal. The judge criticized Goldman for failing to disclose that one of its lead bankers on the team, Steve Daniel, personally owned $340,000 of Kinder Morgan stock.

People like Daniel “get paid the big money because they are masters of economic incentives, and keenly aware of them at all times,” said the Delaware judge, Chancellor Leo Strine.

Goldman had disclosed other conflicts: Its private-equity arm owned a stake in Kinder Morgan, and it controlled two seats on Kinder Morgan's board.