William Galvin, secretary of the Commonwealth of Massachusetts, subpoenaed Goldman Sachs to investigate claims that the investment bank was giving preferential treatment to big clients, he told CNBC in a live interview Wednesday.
"Whenever you have a situation where certain customers are given preferred status over other investors, that is a problem," he said.
The subpoena will include investigating documents associated with secret trading huddles, where Goldman Sachs researchers allegedly gave certain traders short-term advice that was different from its long-term research.
"We're interested in protecting investors — that's our foremost concern," Galvin said. "It's very important that analysis that's presented to the general public, especially from such a reputable house as Goldman, be accurate, be honest, be thorough."
As of now Goldman is the only bank under scrutiny, but it's possible that other firms may be examined, he said. Galvin added that if nothing illegal occured, he will come forward with that information.
Only six years ago, several Wall Street banks had to pay $1.4 billion to settle allegations of bad or faulty research analysis.