Goldman Sachs


Goldman Sachs

] The company also has been on Fortune Magazine's 100 Best Companies to Work For list since the list was launched in 1998. [cite news|title=100 Best Companies to Work 2007, All Stars|url=http://money.cnn.com/magazines/fortune/bestcompanies/2007/allstars/|work=Fortune|date=2007|accessdate=2007-05-18]

In November 2007, Goldman Sachs established a donor-advised fund called Goldman Sachs Gives that donates to charitable organizations around the world, while increasing their maximum employee donation match to $20,000. [ [http://www2.goldmansachs.com/our-firm/press/press-releases/archived/2007/2007-11-21.html Goldman Sachs Establishes Goldman Sachs Gives Charitable Fund] ]

Charitable Services Group

Goldman Sachs Foundation

Notable alumni

*Joshua Bolten - current White House Chief of Staff
*Erin Burnett - CNBC Host
*Jon Corzine - Governor of the State of New Jersey.
*Michael Cohrs - Head of Global Banking at Deutsche Bank
*Emanuel Derman - Author of "My Life as a Quant" and co-developer of the Black-Derman-Toy model.
*Jim Cramer - founder of TheStreet.com, best selling author, and host of Mad Money on CNBC
*Henry H. Fowler - 58th United States Secretary of the Treasury (1965-1969)
*Edward Lampert- Hedge Fund Manager of ESL Investments. Brought K-Mart out of Bankruptcy in 2003.
*Ashwin Navin - President and co-founder of BitTorrent, Inc.
*Abby Joseph Cohen - Perma-bull market forecaster formerly of Drexel Burnham Lambert
*Sacha Baron Cohen - Despite reports by several independent media sources that this well-known comedian is indeed a Goldman alumnus, there has been some controversy over the original source of these claims, with speculation that the supposedly independent sources had themselves used Wikipedia as their own source. [ [http://www.techdebug.com/blog/2008/04/19/wikipedia-article-creates-circular-references/ Tech Debug » Wikipedia Article creates Circular references ] ] Goldman Sachs has never publicly denied having employed Cohen.
*Ocado - 3 Founders of first UK online supermarket were all former Fixed Income Traders at Goldman Sachs London
*George Herbert Walker IV - member of the Bush family and current managing director at Lehman Brothers
*Robert Zoellick - United States Trade Representative (2001-2005), Deputy Secretary of State (2005-2006), "World Bank President".
*Mark Carney - Current Governor of the Bank of Canada [ [http://www.bank-banque-canada.ca/en/press/2007/pr07-27.html Bank of Canada Press Release] ] [ [http://video.google.com/videoplay?docid=-1129635339290732544&hl=en-CA The opaque and unaccountable Mr. Hide] ]
*Henry Paulson - Current United States Treasury Secretary.
*Robert Rubin - Former United States Treasury Secretary, ex-Chairman of Citigroup.
*Charlie Haas - Wrestler, who is working for World Wrestling Entertainment.
*Malcolm Turnbull - Australian politician, currently the federal leader of the Liberal Party of Australia. Former managing director and later a partner of Goldman Sachs in Australia.
*John Thain - Chairman and CEO, Merrill Lynch, and former chairman of the NYSE.
*Robert Steel - Chairman and President, Wachovia.

Criticism and controversy

On August 28, 2007, a former Goldman Sachs associate accused of being the mastermind behind an insider trading scheme, one that pocketed $6.7 million, pleaded guilty in Federal District Court in Manhattan.

The FBI reported on July 6, 2007, that they were investigating letters sent to newspapers nationwide that said "Goldman Sachs. Hundreds will die. We are inside. You cannot stop us." The letters were post-marked in late June from Queens, New York and were handwritten in red ink on loose leaf paper, signed by "A.Q.U.S.A.". [cite news |title=FBI Probes Goldman Sachs Threat Letters|url=http://www.abcnews.go.com/US/story?id=3351832&page=1|publisher=ABC News|date=2007-07-06|accessdate=2007-08-06] A subsequent letter to New York Daily News claimed that the original threat was a hoax "conceived by three misguided teenagers", and pleaded for the investigation to be halted. [cite news |title=Teens behind terror "hoax," sez new letter|url=http://www.nydailynews.com/news/us_world/2007/08/06/2007-08-06_teens_behind_terror_hoax_sez_new_letter.html|publisher=New York Daily News|date=2007-08-06|accessdate=2008-01-20]

In 2005, the firm advised both the New York Stock Exchange and Archipelago, which owns an electronic trading platform, in merger talks. Controversy surrounded the deal as John Thain, who at that time headed the New York Stock Exchange, was a former Goldman Sachs Executive. [cite news |first=Ron |last=Insana |authorlink=Ron Insana |title=NYSE chief: Hybrid trading system's the way to go |url=http://www.usatoday.com/educate/college/careers/Bus_talk/talk8-1-05.htm |work=USA Today |publisher=USA TODAY, a division of Gannett Co. Inc. |date=2005-08-01 |accessdate=2007-01-17]

Also in 2005, Goldman Sachs received criticism from civic groups and New York City politicians when they received approximately $1.6 billion in taxpayer subsidies (mostly through Liberty Bonds) from New York City and state taxpayers to finance the Firm's new headquarters near the World Financial Center in Lower Manhattan in return for a commitment to keep at least 9000 employees and a major trading operation in Manhattan. It also comes with the expectation of the creation of at least 4000 new jobs by 2019. [cite news|last=Lombino|first=David|title=New York Authorizes $1.6B in Liberty Bonds For Goldman Sachs's New Headquarters|publisher=The New York Sun|url=http://www.nysun.com/article/18673|date=2005-08-16|accessdate=2007-03-06]

In 1986, David Brown was convicted of passing inside information to Ivan Boesky on a takeover deal. [cite news |first=Ford S. |last=Worthy |coauthors=Brett Duval Fromson and Lorraine Carson |title=WALL STREET'S SPREADING SCANDAL |url=http://money.cnn.com/magazines/fortune/fortune_archive/1986/12/22/68462/index.htm |work=Fortune Magazine |publisher=Cable News Network LP, LLLP. A Time Warner Company |date=1986-12-22 |accessdate=2007-01-17] Robert Freeman, who was a senior Partner, the Head of Risk Arbitrage, and a protégé of Robert Rubin, was also convicted of insider trading, with his own account and with the firm's. [cite news |first=Landon Jr. |last=Thomas |title=Cold Call |url=http://nymag.com/nymetro/news/bizfinance/columns/businessclass/5693/index.html |work=New York Magazine |publisher=New York Magazine Holdings LLC |date=2002-02-18 |accessdate=2007-01-17]

In 2006, as a result of an SEC investigation, Eugene Plotkin, a former research analyst in the Fixed Income division of Goldman Sachs, and David Pajcin, a former employee of Goldman Sachs, were prosecuted for insider trading. The prosecution began after regulators noticed unusually high trading volume before a merger announcement and discovered that a retired seamstress in Croatia, the aunt of Pajcin, had made more than $2 million. Plotkin and Pajcin traded in at least 25 stocks within one year based on inside information obtained through these schemes. Plotkin was sentenced to 57 months in prison and was also ordered to pay a $10,000 fine and to forfeit up to $6.7 million, the amount of the scam's illegal profits. Pajcin, who cooperated with the government, was sentenced to time served by a federal district court judge on January 18, 2008. ['http://dealbook.blogs.nytimes.com/2008/01/18/co-lead-defendant-in-insider-trading-case-is-sentenced/'] ['SEC Complaint Charges International Insider Trading Ring, Including Personnel at Goldman Sachs and Merrill Lynch', [http://www.sec.gov/news/press/2006/2006-53.htm] ] [The Associated Press, 'FormerGoldman Sachs Analyst Sentenced for Insider Trading', [http://www.law.com/jsp/article.jsp?id=1199441119938&rss=newswire] ]

Goldman in the mortgage market

Actions in the subprime mortgage crisis

Despite the 2007 subprime mortgage crisis, Goldman was able to profit from the collapse in subprime mortgage bonds in the summer of 2007 by selling subprime mortgage-backed securities short. Two Goldman traders, Michael Swenson and Josh Birnbaum, are credited with bearing responsibility for the firm's large profits during America's sub-prime mortgage crisis. ["Time Online", 19 December, 2007, [http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2007/12/18/bcntraders11.xml] ] The pair, who are part of Goldman's structured products group in New York, made a profit of $4bn by "betting" on a collapse in the sub-prime market, and shorting mortgage-related securities. By summer of 2007, they persuaded colleagues to see their point of view and talked around skeptical risk management executives "The Guardian", 21st December, 2007, [http://www.guardian.co.uk/business/2007/dec/21/goldmansachs.useconomy] ] . The firm initially avoided large subprime writedowns, and achieved a net profit due to significant losses on non-prime securitized loans being offset by gains on short mortgage positions. [ The Daily Reckoning, October 19th, 2007, 'Goldman Sachs Escaped Subprime Collapse by Selling Subprime Bonds Short, [http://www.dailyreckoning.com.au/goldman-sachs-2/2007/10/19/] ]

Goldman Sachs' newest acquisitions are to include the subprime portfolio of imploded mortgage company Popular Financial Holdings late in the third quarter of 2008. [ "Market Watch",Popular Announces Substantial Sale of Loan and Servicing Assets of its U.S. Mortgage Unit Popular Financial Holdings to Goldman Sachs, [http://www.marketwatch.com/news/story/popular-announces-substantial-sale-loan/story.aspx?guid=%7B3987B040-C02A-463E-BFA0-BDCCA2C96CDF%7D&dist=hppr] ]

Detractors believe that Goldman wasn't quite as careful with its clients' money as it was with its own—its flagship Global Alpha hedge fund tumbled 37% in the global credit crunch. As most individual investments of hedge funds are not made public, however, no one can know exactly what assets the firm traded during the period leading up to the credit crisis.

Goldman Sachs' Alternative Mortgage Products

In 2006, Goldman Sachs' mortgage-bond division - Alternative Mortgage Products (known as GSAMP for short) - issued 83 home-loan-backed bonds, valued at $44.5 billion. In the subprime sector, it grew its business by 59% from 2005, offloading some $12.9 billion on to fund managers.

According to Inside Mortgage Finance, "that made GSAMP the 15th biggest issuer of subprime-backed bonds in 2006". According to the website ABAlert.com (Asset-backed Alert), Goldman Sachs was one of the top 10 sellers of Collateralized Mortgage Obligations (CMO's) and may have sold about $100 billion in CMO's over the last two and a half years. [ Finfacts Ireland, 'How Goldman Sachs made money from US subprime mortgages on the way up and down', December 4th, 2007 [http://www.finfacts.com/irelandbusinessnews/publish/article_1011979.shtml] ]

But, by the start of the third quarter this year, those securities were being downgraded by the credit ratings agencies faster than any other subprime lender. According to a Reuters report, Citigroup's research (22nd June, 2007), stated "portions of Goldman's GSAMP-issued bonds, which include subprime loans from a variety of lenders, have been downgraded a combined 69 times by Standard & Poor's and Moody's Investors Service in the year through June 15. Sixty of the GSAMP downgrades refer to classes from 2006 bonds," Citigroup added, and Allan Sloane in "The Washington Post" stated that one of Goldman's 2006 crop - the GSAMP Trust 2006- S3 - may actually be "the worst deal…floated by a top-tier firm." One in every six of the 8,274 mortgages bundled together in GSAMP Trust 2006-S3 was already in default 18 months later. Whoever bought the S3 bonds will have either taken a 100% loss, or are waiting to sell it on at a heavy discount. ["The Washington Post", An Unsavory Slice of Subprime, October16, 2007 [http://www.washingtonpost.com/wp-dyn/content/article/2007/10/15/AR2007101501435.html] .]

Change of Status

On September 21, 2008, Goldman Sach's CEO, announced Goldman Sachs was going to change of status from broker to "Bank holding" and hence be able to seek liquidities from the Federal Reserve Board in consideration for higher regulation concerning its activities. http://www2.goldmansachs.com/our-firm/press/press-releases/current/bank-holding-co.html

Works about Goldman Sachs

*cite book |author=Vault |title=Vault employer profile. Goldman Sachs |publisher=Vault, Inc. |location=New York |year=2006 |id=ISBN 1-581-31469-8
*cite book |author=WetFeet |title=The Goldman Sachs Group |publisher=WetFeet |location=San Francisco, CA |year=2004 |id=ISBN 1-582-07450-X
*cite book |author=Ellis, Charles D. |title=The Partnership: The Making of Goldman Sachs |publisher=The Penguin Press HC |location=New York |year=2008 |id=ISBN 1-594-20189-7
*cite book |author=Endlich, Lisa |title=Goldman Sachs: The Culture Of Success |publisher=A.A. Knopf |location=New York |year=1999 |id=ISBN 0-679-45080-7
*cite book |author=Lindskoog, Nils |title=Long-term Greedy: The Triumph of Goldman Sachs |publisher=McCrossen Pub. |location=Appleton, WI |year=1998 |id=ISBN 0-965-21533-4

References

External links

* [http://www.gs.com/ Goldman Sachs]
* [http://www.cogmap.com/chart/goldman-sachs-group-inc Goldman Sachs Organization Chart]


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