Thursday, 24 July 2014
Last updated 13 hours ago
Mar 15 2011 | 2:49am ET
Goldman Sachs will be allowed to keep its stake in a Tennessee bank because it is held by a bank-owned hedge fund.
The Federal Reserve has approved Goldman's application to keep its nearly 10% voting stake in Avenue Financial Holdings, which is actually held by hedge fund Goldman Sachs Investment Partners. The Fed's okay is needed for a bank holding company to own more than 5% of the voting shares of a bank, and Avenue Financial owns Avenue Bank.
The regulator noted that the Avenue stake is held by a Goldman hedge fund, which made the purchase before Goldman became a bank holding company in September 2008, as a passive investment. According to the Fed, Goldman has promised to keep it that way.
"Goldman has committed not to exercise or attempt to exercise a controlling influence over the management or policies of Avenue or any of its subsidiaries," the central bank said in a statement. The approval "is specifically conditioned on compliance by Goldman with the conditions imposed in this order and the commitments made to the Board in connection with the application."
Avenue received $7.4 million in federal bailout money and has yet to repay it.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…