Goldman buys $58 mln Winkelried, Palm fund stakes

Proxy documents filed with the Securities and Exchange Commission Friday also showed that Chief Executive Lloyd Blankfein and other officers, though forgoing 2008 bonuses, received substantial returns from exclusive investment funds.

Goldman disclosed it purchased employee fund interests from Palm for $38.3 million and from Winkelried for $19.7 million to help them "meet their liquidity needs," a Goldman spokesman said. Without those deals, two of the bank's largest stockholders may have raised cash through stock sales.

"Neither we nor the executives involved thought it was in the interest of the firm for them to sell shares in an extraordinarily turbulent market," a spokesman said. "We thought it would send the wrong signals."

Winkelried, 49, is the second-largest individual Goldman stockholder at 2.8 million shares, according to the proxy. Palm is the third-largest.

Winkelried cashed out roughly 30 percent of his employee fund holdings, while Palm sold 25 percent. Goldman chose which stakes it wanted and negotiated the price.

The decision to buy the executives out was made in early September, before Goldman accepted $10 billion in government funds, the spokesman said.

Speculation has swirled about the circumstances surrounding Winkelried, 49, since the veteran trading and investment banking executive placed a Nantucket, Massachusetts, estate on the market last fall for $55 million.

Last month, Goldman announced that Winkelried would retire, effective Tuesday. There was market talk that Winkelried, who also owns a house in Short Hills, New Jersey, and a horse ranch in Colorado, had been squeezed by falling investments.

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