Goldman Executive launched on violations

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(FT) -- Goldman Sachs has fired its head of European block trading for violating internal policies and procedures, the Financial Times has learnt.

Alexandre Harfouche, a London-based managing director, was sacked for failing to make proper disclosures to the bank's compliance department, according to people familiar with the matter.

"Mr Harfouche no longer works for the firm, and I have no idea what his plans are," a Goldman spokesman said, declining to comment further. Mr Harfouche could not be reached for comment.

Mr Harfouche's departure comes after a string of professional achievements, leading to his promotion to managing director, Goldman's second-most senior rank, less than a year ago.

Mr Harfouche has worked on some of the biggest European stock trades in recent years, including Renault's sale of a $4.2bn stake in the Swedish carmaker Volvo last month. The deal was a coup for Goldman -- the bank was the sole bookrunner on the year's largest block trade -- propelling it to the top of the industry league table for such deals.


Mr Harfouche's status is listed as "inactive" with the Financial Services Authority, the UK's main markets watchdog, suggesting he has not joined another regulated firm.

He had been authorised to conduct regulated activities on behalf of Goldman between 2001 and October 31, 2010, according to the FSA register. The agency declined to comment on his change of status but Goldman would have had to notify the FSA of his departure.

While Goldman did not specify the reasons for Mr Harfouche's departure, people close to the situation stressed that no securities law had been violated and no client had been harmed by the events that led to his dismissal.

Block trades, in which a broker places stock with investors on a client's behalf, have grown increasingly important to a banking industry under pressure from regulators to rein in "proprietary" trades with their own capital.

Mr Harfouche's departure comes at a sensitive time for Goldman. In July, the bank had to pay a $550m fine to the US Securities and Exchange Commission over allegations it had defrauded investors in a mortgage-backed security.

Goldman did not admit or deny wrongdoing in that case.

The Financial Industry Regulatory Authority, a US regulator, on Tuesday fined Goldman $650,000 for waiting more than seven months before revealing that the SEC had warned it might sue two employees over the civil fraud allegations. Goldman said it was "pleased to have resolved" that matter.

In September, the FSA fined Goldman £17.5m ($28m) over the same issue.

The bank is finalising an overhaul of internal procedures and business practices that is partly designed to respond to criticism of its conduct and pay practices during the financial crisis.