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13 Reasons Goldman’s Quitting Exec May Have a Point
Propublica / News Report
Published: Thursday 15 March 2012
“We decided to look at just one aspect of their record: SEC charges levied against Goldman and its employees over the past decade.”
An executive at Goldman Sachs left the firm today with a bang, penning a New York Times op-ed accusing the company of increasingly putting profits ahead of clients. Greg Smith started as an intern 12 years ago and last headed a derivatives department. Not surprisingly, Goldman quickly and strongly disagreed with his take.
There have obviously been plenty of unflattering headlines about Goldman in the past few years. We decided to look at just one aspect of their record: SEC charges levied against Goldman and its employees over the past decade.
April 2003: SEC charges Goldman Sachs over conflicts of interest among its research analysts. The company eventually settled for $110 million in fines and disgorgements.
November 2003: Former Goldman economist John Youngdahl pleads guilty to insider trading. The firm had to pay the SEC $4.2 million over profits it gained from the illegal dealings.
July 2004: Goldman settles with the SEC for $10 million over charges it improperly promoted a stock sale involving PetroChina.
January 2005: Goldman settles with the SEC for $40 million over charges that it violated securities law in promoting initial public offerings.
April 2006: Two former Goldman employees are charged with running an international insider-trading ring while they were at the firm. Eugene Plotkin and David Pajcin, both in their 20s, paid off insiders at other firms and stole early copies of Business Week to get an edge. They also tried (unsuccessfully) to use strippers to get information. Both eventually served jail time.
March 2007: A Goldman subsidiary, Goldman Execution and Clearing, settles with the SEC for $2 million over allegations that faulty oversight that allowed customers to make illegal trades.
March 2009: Goldman Execution and Clearing settles with the SEC for $1.2 million over improper proprietary trading by employees.
July 2009: The SEC charges a former Goldman Sachs trader Anthony Perez and his brother with insider trading based on information Anthony Perez obtained through his job at Goldman Sachs. He was fined $25,000 and his brother more than $150,000.
May 2010: The SEC hits Goldman Execution and Clearing with a $225,000 fine for violating a rule aimed at regulating short selling.
July 2010: Goldman settles with the SEC for $553 million over allegations that it misled investors about the collateralized debt obligation ABACUS 2007-AC1 by not disclosing the involvement of a hedge fund in its creation, or the fact that the hedge fund stood to benefit if the CDO failed. Goldman executive Fabrice Tourre was also charged.
March 2011: The SEC charges Goldman board member Rajat Gupta with insider trading. Gupta allegedly passed on information he learned as a board member to the hedge fund Galleon Group. In October, 2011, he was arrested and hit with criminal charges by the FBI. The case is pending.
September 2011: The SEC charges a Goldman employee, Spencer Midlin, and his father for insider trading based on information Spencer Midlin gained from his position at Goldman Sachs. The two men were ordered to pay $92,000.
February 2012: Goldman Sachs receives notice from the SEC that the agency may bring charges related to mortgage backed-securities.
10 comments on "13 Reasons Goldman’s Quitting Exec May Have a Point"
March 17, 2012 2:54am
How is this barely a story? The article has NOTHING to do with 'disgruntled employees who bad mouth the company', it concerns a list of offenses committed by Goldman Sachs and their employees. Why would you step up to their defence? This company is to money what Monsanto is to health. Both are at the top of their leagues at making a lot of each disappear.
Keep in mind that these are only the cases that were caught by the SEC. How many escaped their notice and how many were they unable to prove? The SEC doesn't win many 'cigars' for its vigilance OR ITS 'TEETH'.
March 16, 2012 8:52am
If its three strikes and you are out for the public why is it 13 strikes and you are not out for corporates? This is yet another sign that the law has become so corrupted that it no longer protects the people it was meant to.
March 16, 2012 7:34am
This is barely a story because it's full of facts about the money......I wondered just how much went down the tube. Sometimes, capitolism is equivalent to a despotism, socio- economically speaking. Also, a fact, before all of this financial crisis, the Goldman Sachs ceo's were making Christmas bonuses that were about a million dollars each. I got that nugget from NPR...what about real paying back? Now our womens' clinics in Texas are dismanteled which means women like me can't afford birth control or PAP smears.I also caught on from this edition that lead poisoning can come back with a vengeance because there are no more dollars in the till for monitoring. When has it become a crime in this country to be poor? The lack of funding due to ceo's of goldman sachs are stealing the bread from the mouths of poor babes.
March 16, 2012 3:09am
The thing to look at is what illegal activities and frequency thereof have taken place in the firm with change in CEOs. Blankenfein has been CEO since May 31, 2006. The author's 10th point indicates something about his leadership.
March 15, 2012 7:32pm
So obviously this is just a game SEC is playing with Goldman's! Wakeup peeps!!!!!!!
March 15, 2012 6:41pm
I can not believe these people are still in business. Who deals with them? They are obviously snakes in the grass. What they need to do is end the war on drugs, set all of the 'victimless' inmates free, and replace them with the CEO's of these large banking and insurance institutions that are fleecing America. If there were any real justice, that is exactly what would happen.
March 15, 2012 5:52pm
Wow. Barely a story? Unbelievable.
March 15, 2012 3:44pm
And these are the a**holes Clinton/Obama hires to "run the economy"!
March 15, 2012 6:41pm
Birds of a feather, flock together. What do you expect?
March 15, 2012 3:38pm
This is barely a story. Every large company has disgruntled employees who bad mouth the company. The Times has an agenda to attack Wall Street so this became a front page story. Anyone who criticizes Fox ought to take a hard look at the NYT