NEW YORK (AP) -- Goldman Sachs, the investment bank blistered by a resigning employee this week for how it does business, said Friday that it will try to strengthen internal rules to prevent questions about conflicts 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. He 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.
"We regret that El Paso's board wasn't aware," said David Wells, a spokesman at Goldman. "We are reviewing our policies and procedures with the goal of strengthening them."
The judge noted that Goldman CEO Lloyd Blankfein had called El Paso's CEO, Doug Foshee, and read from a script prepared by Daniel, the banker, that began, "Hello, Doug — it's been a long time since we have had the chance to visit."
In a footnote, the judge said the script had the "troubling side effect" of reminding his staff of the treacly 1980s love song "Hello," by Lionel Richie.
The Op-Ed by the young banker, Greg Smith, caught fire online. On Friday, New York Mayor Michael Bloomberg visited Goldman headquarters to voice his support. He called the scathing public resignation "ridiculous."