A Goldman Sachs Trading Team Sidesteps the Volcker Rule

Sitting onstage in Washington’s Ronald Reagan Building in July, Lloyd Blankfein said Goldman Sachs Group had stopped using its own money to make bets on the bank’s behalf. “We shut off that activity,” the chief executive officer told more than 400 people at a lunch organized by the Economic Club of Washington, slicing the air with his hand. The bank no longer had proprietary traders who “just put on risks that they wanted” and didn’t interact with clients, he said.

That may come as a surprise to people working in a secretive Goldman unit called Multi-Strategy Investing that wagers about $1 billion of the bank’s own funds on stocks and bonds, according to interviews with more than 20 people who have worked for and with MSI, some as recently as last year.