Front running? Goldman & Bright

Hey Don, Do you think bright orders ever get front runned by your buddies at Goldman?

Everyone who is anyone on Wall Street has at some point used the Goldman 360 portal whether for research, news, keeping a track of prime brokerage portfolio or, disturbingly, for trading, via the REDI Plus 9.0 platform (now loaded with enhanced algo trading features to make life for you, dear soon to be frontran Goldman client, so much easier). A second widely accepted Wall Street concept is that a disclaimer is the last thing that anyone reads, if ever. Yet after taking a close look at the Goldman disclaimer for the 360 portal, which is an umbrella waiver or all downstream websites, including REDI, one discovers the following gem:


Monitoring by GS: Your use of the products and services on this Web site may be monitored by GS, and that the resultant information may be used by GS for its internal business purposes or in accordance with the rules of any applicable
regulatory or self-regulatory organization.

One second: by using Goldman 360 a client voluntarily allows Goldman to provide keystroke by keystroke data of everything the client does, even if that includes launching trades via REDI, to Goldman for the internal business purposes. The third thing everyone on Wall Street agrees on is that "internal business purposes" usually (and in Goldman's case, almost exclusively) means proprietary trading.

Are Goldman 360 clients (in)voluntarily signing off a release to be front ran by Goldman on any portal-based trade? Could Goldman please clarify just what "internal business purposes" means in the context of this overarching disclaimer, and also whether Goldman has ever actually used 360 submitted information in the decision making process of its prop trading desk? Lucas Van Pragg: the floor is yours.

Update: several readers have presented some other Goldman Sachs and Spear, Leeds and Kellogg form documents that contain an even more crypitc warning in section 4(f) in Use Of Services:

You acknowledge that we may monitor your use of the Services for our own purposes (and not for your benefit). We may use the resulting information for internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory body and in compliance with applicable law and regulation.
NOT FOR YOUR BENEFIT? I mean, come on, how more clearer does it need to get.

 

All I can say is: "Wow".

 

What's worst is that Goldman is the largest FCM. So what do you think they will do with all the orders they clear?

 

moral of the story: don't clear through b/d's who trade their own accounts. seems obvious enough.

 

A big reason why them seem to make record profits from their internal trading teams each quarter.

They have an eye on where all their big players stand and where the active traders are playing for the day along with net log/short count and can force them them to exit based on their pain tolerance in these crowded trades.

Not sure if they care about the day traders in their trading book but if you can see the crowded trades and make that first push to get the weak out than the rest follow as they fight each other to the exits.

This info can give their prop desk a huge advantage from my standpoint.

 

This concern was posted a long time ago about IB and Timer Hill as well. Frankly I think it's a standard disclosure, but tentacles of Golden Slacks reach far and wide as we know.

 

i clear GSCO. lately, front running me has only hurt their bottom line.

seriously though, i doubt anyone on this board is worth front running.

 

gs is a fed proxy, just it

 

They have the data mining capabilities to fade the Kooks also.Especially in the smaller cap less liquid arena.

 

they ALL do this, are you people really that stupid thinking its a level playing field? Keep it coming fools, we need your money!