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Goldman Criticized by Judge on Kinder Morgan Deal Conflicts

Goldman Sachs Group Inc. was rebuked by Delaware Chancery Court Judge Leo Strine for “incomplete and inadequate” handling of a conflict of interest, less than 14 months after the bank finished examining its business practices.

Strine, in a Feb. 29 ruling, cited “the disturbing nature of some of the behavior” leading to the terms of pipeline operator Kinder Morgan Inc.’s $21.1 billion purchase of El Paso Corp., Goldman Sachs’s biggest takeover assignment last year. The bank, which stands to get a $20 million fee from El Paso, has a $4 billion stake in Kinder Morgan and two employees on its board, both of whom recused themselves from negotiations.