Gordon Brown: Goldman Sachs is morally corrupt
April 20 2010, 3:25 pmIn recent days there has been a great deal of interest in the Investment bank Goldman Sachs. The company, which was once a jewel in America’s economy, now in the wake of their government bailout, the company has become public enemy number one and may have to face a class action lawsuit, the likes of which we have not yet seen.
There are several reasons why Goldman Sachs is now viewed by many as a morally corrupt company and the results of their malpractice could yet deal a major blow to the US economy and others around the world and result in class action.
Lloyd Blankfein - Goldman Chief Executive
Lloyd Blankfein, Goldman’s chief executive, admitted in a voicemail to all staff yesterday that the attention that followed the securities fraud charges was “certainly uncomfortable”, but that the board and management committee were addressing the charges.
The bank also issued a statement again denying the US Securities and Exchange Commission accusations that it or its employees tricked clients into buying bad loans in 2007. Fabrice Tourre, who did the deals over which Goldman has been charged, has been put on paid leave and is at home.
Goldman also faces the loss of lucrative British government work — including a host of planned privatisations — after the Prime Minister described the bank as morally bankrupt.
Why do so many hate Goldman Sachs?
• Lloyd Blankfein, Goldman’s chairman and chief executive, and Gary Cohn, the bank’s president, annoyed the US Administration by suggesting that the bank would have survived the financial crisis without government help. They reversed that position in a letter to shareholders two weeks ago, saying: “Goldman is grateful for the indispensable role governments played.”
• Goldman incensed politicians before its 2009 results announcement in January by apparently planning to pay record bonuses. It cut compensation back at the last minute to $498,000 (£300,000) per employee, lower than its peak payouts in 2007 of $661,000.
• Mr Blankfein, told The Sunday Times in November 2009 that he was doing “God’s work”. The comment went down badly with the Government and the public at a time when thousands of people were losing their jobs every month as a result of a crisis caused in part by financial firms.
• Goldman was in the spotlight for the wrong reasons again in February over its role arranging contentious derivatives trades for Greece, which helped the country to massage its public finances.
