Goldman Sachs to Spin Off Proprietary Trading Unit This Month? (GS)

Goldman Sachs GS could spin off at least part of its proprietary trading operations as early as this month to comply with new financial regulations, according to people familiar with the matter. CNBC.com's Kate Kelly was the first to report. A couple of possibilities are on the table, sources said. One is to seed a hedge fund staffed by former Goldman Sachs traders and replace it in the coming years with third party money as the new rule goes into effect. Another possibility is moving proprietary trading into the firm's asset management unit, where Goldman Sachs invests clients' money. The CNBC.com report notes that "The ban on proprietary trading, which will be phased in over several years, is part of the financial reform bill that was signed into law last month. The move is an attempt to curb the rampant speculation on Wall Street that many say caused the recent financial crisis." Dick Bove, a widely followed bank analyst at Rochdale Securities, told CNBC Wednesday that Goldman Sachs could actually make more money under the new financial rules. "This financial regulation bill is giving Goldman Sachs tremendous advantages, which will enhance their earnings growth," Bove said in an on-air telephone interview. Shares of Goldman Sachs are higher by more than 2.3% today, to $156.73.