A judge in Delaware was critical of financial adviser Stephen Daniel, who owned $340,000 in Kinder Morgan while advising Texas pipeline company El Paso Corp., which recently announced the two companies had agreed to merge.
"We regret the El Paso Board wasn't aware of the investment," Goldman Sachs said in a statement.
The bank said it was aware of the investment but allowed Daniel to work on the deal because Kinder Morgan Management LLC is an oil exploration and production-oriented company, whereas Kinder Morgan Inc. is a pipeline company, the Journal said.
However, Barclays Capital, Bank of America, Merrill Lynch, Citigroup Inc. and Goldman Sachs are now reviewing their policies on conflicts of interest.
"All the banks are thinking about the very issue," said Kevin Genirs, the general counsel of Barclays Capital's investment banking division.