Goldman Sachs Group Inc. will pay US$2 million to settle allegations that its employees in 1999 and 2000 illegally offered securities by e-mail to several institutional customers.

Goldman settled with the Securities and Exchange Commission over allegations that it violated federal securities laws in connection with certain public offerings during 1999 and 2000 by making illegal offers of securities by email to certain institutional customers, for failing reasonably to supervise its employees and, making inappropriate statements to the press.

Goldman consented to the order without admitting or denying the commission’s findings. The order included a cease and desist order as well as the US$2 million civil penalty.

According to the order, Goldman violated the Securities Act when serving as an underwriter in four international public offerings, when salespersons on its New York Asian Shares Sales Desk sent lengthy and detailed emails concerning the offerings to numerous institutional customers during the “waiting period” after a registration statement is filed, but before the commission declares it to be effective.

The SEC also found that a senior Goldman rep spoke to the press ahead of PetroChina Co. Ltd.’s global, multi-billion dollar initial public offering. Goldman violated the Act by making comments about the offering, explaining that the proceeds of the offering would be used in China, and not in Sudan, before the registration statement was filed.