Some investors are shrugging their shoulders at reports that Goldman Sachs Group Inc (GS.N) gives special trading advice and early access to analyst research to a select few clients, saying the practice is commonplace in the industry.

The Wall Street Journal reported on Monday that Goldman hosts a weekly meeting of its research analysts, joined by top clients, to discuss trading ideas. The story raised the issue of favoritism for top Goldman clients, prompting the Financial Industry Regulatory Authority and the Securities and Exchange Commission to commence investigations, the paper said Tuesday.

FINRA, the securities industry's regulatory arm, said it was looking into the situation. The SEC declined to comment.

Investors like Marshall Front, chairman of Front Barnett Associates LLC, said Goldman Sachs is not alone among brokerage firms in favoring their largest and most productive clients with trading tips.

It's not a big deal so long as market-moving information is not being shared, according to this view.

As long as there is no deception involved and people aren't being misled, which I don't think is the case, it is just a common practice and Goldman is not alone in following it, said Front, whose Chicago-based firm manages $500 million.

Others say Goldman risks alienating some of its smaller trading clients who do not enjoy access to these so-called trading huddles.

I would be upset if I were a Goldman customer and I felt that others were getting information before I did, said Lawrence White, a professor at New York University's Stern School of Business. I think they have a customer relations problem on their hands.

A Goldman Sachs spokesman did not return messages seeking comment for this story.

Because of the potential to anger clients, some, like investor Walter Todd, said sharing tips only with a firm's best customers may not be a best practice. But they don't see how it breaks the law.

I don't necessarily agree with it, but I don't think it is illegal as long as it is disclosed to clients up front, said Todd, a portfolio manager with Greenwood Capital Associates, which manages more than $700 million. I think we need to wait and see the facts.

Todd said it is not new that analysts share their thoughts on investments with the firm's most profitable accounts before broadly disseminating the information.

Analysts frequently talk to investment clients and just give them the latest and greatest news, even if they haven't put that out there in a report, he said.

GOLDMAN UNDER SCRUTINY

Goldman, Wall Street's largest and most profitable bank, has come under scrutiny in recent years. It has been facing a public backlash over its outsized bonus pool and its billions in profit so soon after it repaid $10 billion received last fall from the U.S. Treasury's Troubled Asset Relief Program.

Michael Holland, a money manager with New York-based Holland & Associates, called the scrutiny over Goldman's trading tips a sign of the times and the season.

It is fashionable to dump on Wall Street, particularly those making money in this difficult time, Holland said. Plus, it is the end of August and there is very little else going on.

In a time when the securities industry is still reeling from the financial crisis that paralyzed markets last year, some investors believe regulators could better spend their resources elsewhere.

Relative to the other abuses and issues securities regulators face, Front said, This is not an issue that I would think would rise to the top of the heap of issues that has to be dealt with.

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