Friday's Headlines: Goldman Sachs sees traders flee as bonuses shrink

Traders on Goldman Sachs' North American government bonds and derivatives desk are leaving the firm en masse, Reuters reports.

The news wire says more than a dozen traders have left "as the bank takes fewer risks and big bonuses for ambitious traders dry up." Departing traders have joined Merrill Lynch, Morgan Stanley, UBS, Nomura, Jefferies and JP Morgan.

Goldman Sachs has been favoring sales people recently, giving promotions and raises to them instead of traders, Reuters says, citing source familiar with the bank's business.

"The changes reflect Goldman's shift toward client trading and away from making money by betting for its own account, those sources said," according to Reuters. "Weak trading in general has compounded Goldman's difficulties as it struggles to earn profits from clients without the help of its market bets, analysts said."

Other News:

Millennium hedge fund hires former Bank of America prop trading team. [Bloomberg]

Most hedge funds justified in avoiding Dodd-Frank rules, study says. [Wall Street Journal]

Santander may decide to launch UK retail arm with IPO. [Reuters]

CalPERS hedge fund chief Kurt Silberstein leaves for US Bank. [Hedge Fund Net]

Citigroup, Goldman Sachs CMBS traders depart amid challenging climate. [BusinessWeek]

Federal Reserve orders Royal Bank of Scotland to obey US laws. [Dow Jones News Wires]

JP Morgan top financial institution in Houston, according to magazine ranking. [Biz Journals]

Merrill Lynch global securities chief Mike Stewart to join UBS to co-head global equities. [Wall Street Journal]