While acting as a financial advisor for Wing Hang Bank on a voluntary offer for the bank, Goldman Sachs' conduct "fell far short of the standards expected of a financial advisor", the SFC said.
Goldman Sachs executed 111 trades in the securities of Wing Hang Bank without making the dealing disclosures that it was required to, and prior consent was not obtained for 26 of these trades. It also issued and distributed research reports on Wing Hang, contrary to restrictions on this.
Goldman Sachs contacted the SFC itself in January 2014 to report the breach, after it realised its error. Goldman Sach's investment banking team had failed to tell its global compliance control room that an offer period for Wing Hang Bank had begun, the SFC said.
The SFC said it took Goldman Sach's cooperation and self-reporting on the breaches into account in deciding what sanction to impose.
"The executive is pleased to note that Goldman Sachs has introduced enhanced compliance policies and procedures to ensure future compliance with the takeovers code. However, the executive considers the breaches…to be serious and to merit the present disciplinary sanction. The breaches suggest a significant breakdown in the compliance policies and procedures of Goldman Sachs in relation to takeovers in Hong Kong," the SFC said.
Goldman Sachs' investment banking team has been reminded of its responsibilities under the takeover code, and "refresher training" has been given to relevant team members, the SFC said.