David Solomon had a message for Goldman Sachs Group Inc. employees shaken by the firm’s involvement in a multibillion fraud scandal: “I am personally outraged that any employee of the firm would undertake the actions spelled out in the government’s pleadings,” the firm’s chief executive officer said in a voicemail left with employees on Wednesday. “The behavior of those individuals is reprehensible and inconsistent with the good work and integrity that defines work that 40,000 of you do every day.” The bank’s stock has suffered since prosecutors implicated a trio of Goldman Sachs bankers in a multibillion-dollar Malaysian fraud early this month. On Monday -- when the country’s finance minister said he would seek a full refund of all the fees it paid for 1MDB deals -- Goldman’s shares tumbled the most in seven years. The bank’s stock dropped for a fifth straight day on Thursday, falling 0.3 percent at 11:43 a.m. in New York, putting it on track for the biggest five-day slump in seven years and cutting Goldman’s market value by more than $10 billion. Analysts and investors have been trying to estimate what the financial fallout of the scandal will be for the firm, after it said in a filing this month that it could face significant fines. Solomon said in his voicemail that “any speculation in the press or elsewhere” on outcomes for the firm “is completely unfounded.” A spokesman for Goldman Sachs confirmed the authenticity of the voicemail and declined to comment further. Goldman Sachs is trying to counter arguments that fault lies beyond a few employees. Tim Leissner, the bank’s former chairman of Southeast Asia, admitted in a plea that he bribed officials to get the bond deals and said a culture of secrecy at the investment bank led him to conceal wrongdoing from the company’s compliance staff. The firm’s then-CEO Lloyd Blankfein personally helped forge ties with the country and 1MDB years before Goldman Sachs ever arranged the bond deals at the heart of the probes. Blankfein attended a 2009 meeting with the former Malaysian prime minister that laid the groundwork for the relationship between the two entities, Bloomberg first reported earlier this month. “Reputationally, it is a disaster for Goldman,” Oppenheimer & Co. analysts led by Chris Kotowski said in a note to clients Wednesday. “Goldman clearly is at risk of significant charges with significant penalties in this case.” Analysts at Sanford C. Bernstein & Co. estimated that Goldman Sachs could see fines of up to $2 billion from the scandal, a figure they said was “ultimately manageable” for the firm. “A group of people, including some of us in the executive office, are intensely focused on this matter,” Solomon said on the voicemail. “For the rest of us, our job is to focus on our clients, our business and the many opportunities ahead.” https://www.bloomberg.com/news/arti...ly-outraged-by-1mdb-scandal?srnd=premium-asia
I am sure he wouldn't be if they are not caught and its stock price is not tanking. He wasn't "personally outraged" before. He's only personally outraged now because his personal stock option that's tied with the company's stock price is also tanking and he's personally losing money. LOL What a farce!
I think that this is part of Solomon's strategy to isolate the problem to a few "rogue" employees and shield the rest of the company from it. His strategy to do "damage limitation". However, the US DoJ has it that at least about 30 high level employees at GS were involved in all this. And that they purposely circumvented the Compliance Department during a period of multiple years. I wonder what the impact to GS would be if those 30 people were removed from their jobs: what would the impact be on running the company? That could potentially have much more implications for GS than a fine of a few billion USD. Meanwhile is it getting clear that GS was involved in more shady deals with other Malaysian entities than what is being referred to in this article.
Regardless of his shield strategy, how far and high up that DoJ wants to go to is up to the DoJ and how much Goldman wants to pay up that is IF DoJ or the court or SEC is willing to accept $$ fines like SEC and the Feds did with Steven Cohen. One thing for sure, they are not going to just take this guy's word for it that this is the works of just "those individuals".
Isn't this exactly what SAC's Cohen did? There are always desperate idiots doing the dirty stuff as long as they get their bonuses. In the end they get jail-time as the big guys get bigger bonuses and issue a letter of "outrage".
Indeed. The "30 involved employees" is a statement coming from the DoJ's documents, not from the plea bargain of this one individual manager. The DoJ seems to be digging a bit deeper into GS this time.
What he isn't 'outraged' about is their shitty auditing system which allows employees to carry out such a mind boggling large transaction which never raised a red flag in the first 1 hour of this corruption. You can't tell me seriously in this day and age that this went on totally undetected from day one. Is their systems that shonky?
Maybe he means he (as an individual) is outraged, but he (as the CEO) doesn’t think anyone did anything wrong.
Leissner cites Goldman's culture in concealing 1MDB scheme http://www.theedgemarkets.com/article/leissner-cites-goldmans-culture-concealing-1mdb-scheme