Ethics: Goldman Sachs
“Goldman Sharks Swimming in Grey Water”
Don Tram
Joel Valenti
Marcio Vandik
Christine Vanstrom
March 29th, 2012
Executive Summary
Goldman Sachs, founded by German immigrants, began as a small humble business looking to succeed. Over time their business strategy changed and they entered into ethical and legal issues they had not encountered before.
In the late 1920s Goldman Sachs began maliciously investing in companies to drive their demand. They coined this term “laddering” from overleveraging them selves and putting the market at risk. Their actions created the bubble that burst in the stock market crash of 1929.
Furthermore, Goldman Sachs engaged in “trading huddles”. Only their preferred customers where chose to participate on this unethical schemes, and the same customers were shot changed on financial profit from unprofitable IPO’s shares. It was clear that Goldman Sachs business focus was not customer based but self-based by the mantras that they use to have: “long-term greedy” and “Filthy rich by forty.”
In 2008 the market once again crashed equally as hard as in 1929 and Goldman Sachs was at the root of the cause. With self-fulfillment and greed in mind, Goldman Sachs used Collateralized Debt Obligations and bet against their clients to increase profitability. Goldman Sachs progressively became more unethical in their dealings, and the SEC took notice. Goldman was accused on two accounts of fraud because of one particular portfolio of securities, named ABACUS, which they dealt with.
After analyzing the case and reviewing the unethical actions and alleged accusations against Goldman Sachs, it is clear that Goldman Sachs was operating unethically. They misrepresented, hid information, and engaged in conflicts of interest with their clients. Goldman Sachs took an unfair advantage with their “toes to the line mentality” on their legal and ethical issues leading the SEC to establish harsher regulations for the banking industry.
Don Tram
Joel Valenti
Marcio Vandik
Christine Vanstrom
March 29th, 2012
Executive Summary
Goldman Sachs, founded by German immigrants, began as a small humble business looking to succeed. Over time their business strategy changed and they entered into ethical and legal issues they had not encountered before.
In the late 1920s Goldman Sachs began maliciously investing in companies to drive their demand. They coined this term “laddering” from overleveraging them selves and putting the market at risk. Their actions created the bubble that burst in the stock market crash of 1929.
Furthermore, Goldman Sachs engaged in “trading huddles”. Only their preferred customers where chose to participate on this unethical schemes, and the same customers were shot changed on financial profit from unprofitable IPO’s shares. It was clear that Goldman Sachs business focus was not customer based but self-based by the mantras that they use to have: “long-term greedy” and “Filthy rich by forty.”
In 2008 the market once again crashed equally as hard as in 1929 and Goldman Sachs was at the root of the cause. With self-fulfillment and greed in mind, Goldman Sachs used Collateralized Debt Obligations and bet against their clients to increase profitability. Goldman Sachs progressively became more unethical in their dealings, and the SEC took notice. Goldman was accused on two accounts of fraud because of one particular portfolio of securities, named ABACUS, which they dealt with.
After analyzing the case and reviewing the unethical actions and alleged accusations against Goldman Sachs, it is clear that Goldman Sachs was operating unethically. They misrepresented, hid information, and engaged in conflicts of interest with their clients. Goldman Sachs took an unfair advantage with their “toes to the line mentality” on their legal and ethical issues leading the SEC to establish harsher regulations for the banking industry.
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