Goldman To Shut Down Principal Strategies Unit

Bloomberg reports that Goldman Sachs (GS) is disbanding its Distribution Strategies business, a group responsible for investing the firm’s own capital, to comply with new U.S. rules and regulations aimed at curbing risk. Under the new Dodd-Frank Act, banks are strictly prohibited from engaging in prop trading, or making bets in the market for the bank’s own profits.

Goldman employs about 65 to 70 employees in the unit, the news agency said. Some of them may be transferred to other divisions within the firm while the team in Asia may try to raise money for a new hedge fund, according to Bberg.

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