Widows and orphans..you know you've hit rock bottom when one of your star department heads is actually bragging about the fact he managed to sell some of the intentionally designed mortgage security pools to widows and orphans in an airport stopover! We're not talking about sophisticated investors here! Bad enough, sophisticated investment funds were unwittingly duped by Goldman Sachs, but how about their less sophisticated customers? Even though the self termed, 'Fabulous Fab' did not literally mean widows and orphans, you get the sense this ethics would have allowed it.
It is very telling when an organization's ethical bar has dropped so low that even >widows and orphans are fair game. Not only fair game, but sought after targets. It is clearly a Masters of the Universe culture when a company can stack the deck, deal out the losing hand to their gullible customers, then bet against the gullible customer's hand, then smirk and enrich their smarter customers when the losing bet is paid off. The Goldman Standard: Great American Greed! It all starts from the top. Given this, CEO Blankfein should go. At Friday's annual shareholder's meeting he should step down as both Chairman and CEO. The Wall Street Journal reported today there is speculation about the shareholder proposal to split the roles of Chairman and CEO at Goldman Sachs. Too little, too late, is this case.
If Goldman Sachs is to regain the public trust, they must begin anew with a new leader and a new code of ethics and conduct for the company. And soon!
Their behavior clearly gives new evidence to the expression, 'Caveat Emptor' (let the buyer beware). Goldman customers believed the were buying a product Goldman was representing and warranting to be with a AAA chance of performing reasonably well. How many of those clients would have purchased the product if they knew a bigger, more important, wealthier client specifically picked the securities so they had a greater chance of failing and they would have a greater chance of winning their bet that a failure was likely? Not many, I suspect. Perhaps a refund to those clients is in order?
It is truly a sad day in banking when ethical standards are replaced by greed in pursuit of sales and profits, at any expense! Goldman Sachs has clearly re-defined customer service standards: "If you are our customer you must accept whatever standard we use to serve you.*" The asterisk is: "This may include a market decision to take advantage of your stupidity."
Their actions may cause legislators to define what fiduciary responsibility to clients means? Shame on Goldman Sachs for giving all investment banks and perhaps banks, in general, a black eye. This is not fair to the vast majority of banks out there who work hard everyday to truly serve the customer's best interests and would never tolerate this type of behavior. I know, because I ran one of them as the former CEO of a community bank that was awarded an award from the Better Business Bureau for excellence in customer service and ethics.
I would like to see Goldman Sachs return to their previous 'Gold' standard reputation. To accomplish this, they will need a major catalyst for change. Top down.
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