Goldman Sachs

Only available on StudyMode
  • Download(s) : 270
  • Published : July 16, 2010
Open Document
Text Preview
The stake holder of Goldman Sachs are it stockholders, investors and those who conduct various financial transactions with the company and have any vested financial in the company. The impact that Goldman Sachs has had on it’s stakeholders has taken a n financial toll on many as there investments were lost the public perception of Goldman Sachs and many companies like them has changed dramatically due to the errors of their ways. When a company as large as Goldman Sachs gets accused of fraud and bad investments when they were previously thought of and sound business investments it send a shock to the financial markets around the world. The damage to Goldman Sachs reputation extends beyond the immediate crisis, because this type of business depends on the reputation that precedes them making them now a target of ridicule in the business world. Many different commentators on the Goldman Sachs scandal say there were no ethical values from there top CEO’s that they made a gamble and careless decisions and poor choices for the company. “As a global investment bank and financial intermediary, Goldman Sachs integrates advice, financing, market-making, co-investing and asset management with its risk management capabilities to serve a broad range of largely institutional clients”. With that being said Goldman Sachs has a certain level of responsibility to the stakeholders and to the general public they are doing business with to conduct themselves in a fair and honest manner while working within the best interest of the clients. Since Goldman itself made a profit by betting against the mortgage investment which it sold to its customers the guilt was quite evident as more information was discovered. “The instrument in the S.E.C. case, called Abacus 2007-AC1, was one of 25 deals that Goldman created so the bank and select clients could bet against the housing market”.

Once the abacus deals fell in value Goldman and their hedge funds made a profit on their negative bets. As for clients who bought into this scheme, they lost billions in their investment dollars. The financial sector needs an overhaul in recent years there have been many scandals and schemes that have shook the financial world and exposed more than they have wanted the public to know. Securities and Exchange Commission filed a civil lawsuit against Goldman and Sachs. “The product was new and complex but the deception and conflicts are old and simple” said Robert Khuzami, Director of the Division of Enforcement. The SEC’s is continuing their investigation on the practices of investment banks such as Goldman and Sachs due to the distressed housing market. The SEC is stating that Goldman Sachs VP is responsible for Abacus 2007-1, once the Abacus portfolio downgraded, investors in the liabilities of Abacus allegedly lost up to one billion dollars as a result of this scheme, while Goldman Sachs profited in its earnings. Goldman Sachs had wrongly and knowingly permitted a client that was betting against the mortgage market to influence the mortgage securities which included a large investment portfolio. After the SEC announced it would bring a civil suit against Goldman and Sachs there stock fell to more than ten percent within the first half an hour of trading, once the market closed Goldman Sachs had lost almost ten billion of the company’s market value. Many other firms were also on the alert to see if they too would be involved in scandals such as Goldman Sachs and were taking precautionary measures to avoid the same fate. Goldman Sachs made a statement claiming that they had been involved in any scheme to sell clients mortgage linked securities that they did have confidence in or knew of possible failure simply blaming the collapse of the house market as a contributor to the failed plan….

Goldman Sachs is also claiming to be victims stating they had no first hand knowledge of the possibility of the...
tracking img