The Securities and Exchange Commission reportedly is seeking documents from the Massachusetts’ Treasury Department in reference to its relationship with Goldman, Sachs & Co.

The department Monday confirmed that it must hand over information to the SEC.

“We are cooperating fully and promptly with the [SEC’s] request for documents consistent with our commitment to running a transparent and accountable Treasury,” Al Gordon, director of policy at the Treasury, said in a statement. “Due to the nature of this matter, we cannot comment further.”

The Boston Globe Monday reported that the SEC is looking for documentation beginning June 1, 2008, that might provide details about the relationship between former Treasurer Timothy Cahill, Goldman, and former Goldman municipal banker Neil Morrison. The paper cited an unnamed official who was briefed on the subpoena.

Cahill made an unsuccessful bid for governor in November and ended his second term as the state’s treasurer last week. His campaign denies that Cahill is mentioned in the SEC probe.

“The campaign’s understanding is that the SEC, in performing its oversight role of municipal securities dealers, is seeking information about Goldman Sachs and Neil Morrison,” the Cahill Campaign Committee said in a statement. “Tim Cahill is not the subject of the SEC inquiry.”

Steven Grossman succeeded Cahill as treasurer. Morrison began at Goldman on June 1, 2008, as vice president in the Northeast coverage group. He also served as an informal and unpaid adviser to Cahill during his campaign. It is unclear when Morrison began advising Cahill, who officially announced his bid for governor in September 2009.

Mark Zehner, deputy director of the SEC’s muni and public pension enforcement unit, said he could neither confirm nor deny that the agency is investigating the issue. Goldman spokesman Michael Duvally also declined to comment. Morrison did not return a phone call seeking comment.

Under the Municipal Securities Rulemaking Board’s Rule G-37, banks cannot work on debt sales for two years if their employees make political contributions above $250 to issuing officials. While bankers may provide volunteer work, the volunteering must occur during non-working hours and the bank cannot pay the volunteer’s salary. Political contributions, including volunteer work, that surpass $250 in value must be reported to the MSRB.

Since September 2009, when Cahill began his gubernatorial campaign, Goldman has served as book-runner on two negotiated transactions: a $444.5 million Massachusetts Water Pollution Abatement Trust deal that priced June 29 and a $956.4 million general obligation bond sale that priced Dec. 1.

The Treasury Department executes bond deals for the MWPAT. Its board consists of a total of three designees from the Treasury, the Executive Office of Administration and Finance, and the Department of Environmental Protection.

Just prior to reports about Morrison, Goldman in October asked the Massachusetts Housing Finance Agency to remove it as book-runner on a Series 2010A bond sale for $69.9 million that priced Dec. 1. The Massachusetts Bay Transportation Authority temporarily removed Goldman from its co-senior underwriting pool, upon the bank’s request.

Register or login for access to this item and much more

All On Wall Street content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access