Goldman Sachs Warned of Bond-Sale Stoppage

Goldman Sachs Group Inc. said Monday that it was among the companies told of the U.S. Treasury Department’s decision to stop selling 30-year bonds ahead of the government announcement two weeks ago.

Goldman Sachs didn’t engage in wrongful behavior and will assist authorities with an investigation, said spokesman Peter Dietlmaier in Frankfurt. The firm wouldn’t comment on whether its traders tried to benefit from the information by buying bonds before the government’s announcement.

Goldman’s knowledge suggests the leak may have been widespread. The company is the third known to have been called by consultant Pete Davis minutes ahead of the Treasury’s 10 a.m. announcement on Oct. 31 that it was halting the sale of the bonds. Stone & McCarthy Research Associates and Capra Asset Management also got phone calls from Davis.

“When we became aware of this situation, we contacted the proper authorities to inform them of Mr. Davis’ call,” Goldman said.

The story was first reported by the Wall Street Journal.

The Securities and Exchange Commission has said it is investigating several bond-trading firms. Traders with advance knowledge had an advantage on a day bonds posted their biggest gains since the October 1987 stock-market crash.