“Goldman Sachs would never condone one of its employees misleading anyone, certainly not investors, counterparties or clients,” the bank said in the letter to clients, according to a story by The Associated Press. Click here to read the AP story. And click here to see the SEC’s press release.
Never? Can Goldman Sachs really expect anyone to believe its use of the word, never?
What about last March, when it was one of 14 specialist firms that paid $70 million to settle SEC charges for unlawful trading?
“These firms violated the public trust by abusing the privileged position they had as specialists on the various exchanges,” said James Clarkson, Acting Director of the SEC’s New York Regional Office. Click here to see the SEC release.
What about March 2007 when Goldman Sachs paid $2 million to settle SEC allegations that it allowed some of its customers to illegally profit by selling securities short just before public stock offerings? Click here to see the SEC release.
What about May 2006, when Goldman was one of 15 Wall Street firms to pay more than $13 million in fines to settle SEC allegations over violations in trading auction rate securities? Click here to see the SEC release.
What about January 2005, when Goldman agreed to pay $40 million to settle SEC allegations that it doled out hot IPO stocks as an inducement to get customer to buy additional shares in the aftermarket to help pump up the price? Click here to read the SEC release.
What about March 2004, when Goldman subsidiary Spear, Leeds & Kellogg Specialists LLC was one of five firms to pay $240 million for running trades ahead of its customers?
“When an exchange specialist unlawfully takes advantage of its privileged position by seizing trading opportunities that it should leave for public customers, it fundamentally undermines the fair and orderly operation of the exchange auction system,” said Stephen M. Cutler, the SEC’s Director of Enforcement. Click here to read the SEC release.
And what about September 2003 when Goldman paid $9.3 million because it’s chief economist was getting insider trading tips from the Treasury Department? Click here to read the SEC release.
I know, I know. Goldman Sachs cooperated in a lot of these deals, like a stung street informant. And it typically settles allegations without admitting nor denying guilt.
Still, I think “never” is a pretty big word for Goldman Sachs to be wielding. Unless it’s prepared to say we should “never” believe a word it says.