Kinder Morgan-El Paso
Kinder Morgan-El Paso

At a time when Goldman Sachs was being derided for treating its clients like "muppets," the $21 billion acquisition of rival pipeline company El Paso by Kinder Morgan (KMI, Fortune 500) seemed like yet another datapoint. Goldman advised El Paso on the deal. Yet, Goldman owned nearly 20% of Kinder at the time. Goldman's lead banker, too, was a Kinder shareholder.

Goldman's split loyalty, El Paso shareholders later said, resulted in a lower price for their company. A Delaware judge heavily criticized Goldman and El Paso's board of directors for the conflicts of interest, but approved the deal anyway. Kinder ended up paying $110 million to settle the shareholder suit. Goldman had to forgo its $20 million fee.

  @FortuneMagazine - Last updated December 28 2012 03:45 PM ET
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