Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  Goldman Sachs Group    GS

GOLDMAN SACHS GROUP (GS)
Mes dernières consult.
Most popular
  Report  
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsofficial PublicationsSector newsTweets

Goldman Sachs Group, Inc. : Goldman unveils checks on conflicts in bid to fix image

share with twitter share with LinkedIn share with facebook
share via e-mail
0
05/24/2013 | 01:19am CEST
A Goldman Sachs sign is seen over the company's trading stall on the floor at the New York Stock Exchange

SALT LAKE City (Reuters) - After dozens of meetings with executives and regulators, 100,000 hours of employee training and an immeasurable amount of public grief, Goldman Sachs Group Inc's Lloyd Blankfein claimed success in putting the bank and his legacy as CEO back on track.

At Goldman's annual meeting on Thursday, Blankfein unveiled details of a three-year review and overhaul of the bank's practices in dealing with clients, following high-profile missteps that tarnished its reputation in the aftermath of the financial crisis. The overhaul imposes checks, including through elaborate computerized systems, to ensure that the bank is fair to clients and avoids conflicts, such as being on different sides of the same trade.

Goldman's changes do not appear to go beyond the kind of committee reviews that other Wall Street firms now do, executives at two rival banks said. But they added the use of computerized analyses to detect unfair deals could make the system more effective than rivals' at catching potential pitfalls, even if it costs them some business.

"They want to get their reputation back," said Roy Smith, a professor at New York University's Stern School of Business. "They know that means giving up some business."

Goldman faced public outrage in the aftermath of the 2008 financial crisis over accusations, including a U.S. Securities and Exchange Commission lawsuit, that it had treated clients improperly. Blankfein and other executives also faced intense grilling on Capitol Hill, which deeply embarrassed its CEO.

After serving as CEO since June 2006 and steering the bank through the financial crisis, the 58-year-old Blankfein does not want to leave his post until he feels the bank's reputation and his own legacy are fully restored, people familiar with the situation said.

The month after the SEC's charges, Blankfein set up the Business Standards Committee. He travelled around the world to hold town-hall-style discussions with Goldman partners and managing directors. In a video on Goldman's website on Thursday, Blankfein tells a group of employees not to be afraid to call him if a problem appears because the risk of reputational damage outweighs the cost of possibly wasting his time.

"Everyone has to have big eyes, big ears, know what's going on around them, and be policemen for the organisation," he said.

The venue of the annual meeting - in Salt Lake City, where Goldman is heralded as an economic saviour because of its recent expansion there - provided a friendlier atmosphere than other recent shareholder gatherings, where protestors drowned out talk of the committee's progress.

The company won shareholder support for its 12 nominees to the board and its positions on the seven other proposals on the ballot. The lowest vote the company received was 68 percent approval for its new stock compensation plan for executives.

Such plans tend to win support from around 85 percent of shareholders, according to proxy solicitor Georgeson Inc.

CHECKS AND BALANCES

Under the reforms, Goldman staffers are expected to be "looking around corners" to make sure deals that seem lucrative in the short term won't harm the bank later, the co-chairs of Goldman's Business Standards Committee told reporters at a briefing on Wednesday. The panel, led by J. Michael Evans and Gerald Corrigan, performed the review and implemented changes.

Evans said many proposed deals will now encounter hurdles that didn't exist before. If they don't clear them, Goldman won't get involved.

In the past, Goldman salespeople and bankers could sell clients almost anything they wanted to buy. Under the reforms, they must now run transactions through computerized processes - which the bank calls matrixes - and sometimes get top-level approvals to make sure deals are appropriate.

Transaction that don't pass muster are taken to more senior Goldman managers. Deals that reach the top executives tend to involve large derivatives or complicated financing schemes, complex structured derivative products or products that involve tax, accounting or regulatory arbitrage, Evans said.

New products proposed by Goldman staff also must run through a committee for approval, Corrigan said.

It will be possible for clients to appeal. Evans gave examples of one unnamed IPO client that took its business elsewhere when Goldman rejected its plan, and another that "begrudgingly" made changes so that Goldman would advise.

Evans said crisis-era deals, like the Abacus and Timberwolf derivatives trades that were documented in a U.S. Senate subcommittee report and involved litigation, would likely not be approved in the same manner today.

Abacus, a synthetic collateralized debt obligation, was the focus of the SEC case. The regulator had said that Goldman allowed Paulson & Co to help pick residential mortgage-backed securities underlying the CDO while the hedge fund was also betting against the security, and failed to disclose that to buyers of the CDO.

"If Abacus came today, it would run through a totally different framework for approval than before," Evans said.

(Additional reporting by David Henry; Editing by Frank McGurty, John Wallace, Jan Paschal and Andre Grenon)

By Lauren Tara LaCapra

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on GOLDMAN SACHS GROUP
05/24Goldman, Blackstone Make Peace in Credit-Derivative Standoff
DJ
05/22REGENERON PHARMACEUTICALS : Announces Upcoming Investor Conference Presentation
AQ
05/21Data firm IHS Markit to buy Ipreo in $1.86 billion deal
RE
05/21GOLDMAN SACHS : 10,000 Women Launches Online Education Partnership with Coursera
PU
05/21BAXTER INTERNATIONAL : to Present at the Goldman Sachs Healthcare Conference
AQ
05/21IHS Markit Agrees to Buy Ipreo for $1.86 Billion
DJ
05/21GOLDMAN SACHS : IFC, Goldman Sachs Initiative Invests $1 Billion in Women Entrep..
AQ
05/19GOLDMAN SACHS : Entity Files IPO -- WSJ
DJ
05/19GOLDMAN SACHS : Backed Firm Seeks Industrial Deals -- Update
DJ
05/18GOLDMAN SACHS : Blank-Check Company Backed By Goldman Sachs Files for IPO
DJ
More news
News from SeekingAlpha
05/24GOLDMAN, BLACKSTONE RESOLVE DISPUTE : Wsj 
05/24MARKET VOLATILITY BULLETIN : S&P Holds The 2700 Line In The Wake Of Geopolitical.. 
05/24IHS Markit To Acquire Ipreo For $1.86 Billion And More Debt 
05/2423 Upcoming Dividend Increases 
05/23GOLDMAN MADE $200M ONE FEBRUARY DAY : Cnbc 
Financials ($)
Sales 2018 35 327 M
EBIT 2018 12 217 M
Net income 2018 8 994 M
Debt 2018 -
Yield 2018 1,35%
P/E ratio 2018 10,35
P/E ratio 2019 9,83
Capi. / Sales 2018 2,54x
Capi. / Sales 2019 2,50x
Capitalization 89 825 M
Chart GOLDMAN SACHS GROUP
Duration : Period :
Goldman Sachs Group Technical Analysis Chart | GS | US38141G1040 | 4-Traders
Technical analysis trends GOLDMAN SACHS GROUP
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 28
Average target price 272 $
Spread / Average Target 14%
EPS Revisions
Managers
NameTitle
Lloyd Craig Blankfein Chairman & Chief Executive Officer
David Michael Solomon President & Chief Operating Officer
R. Martin Chavez Chief Financial Officer & Executive Vice President
James A. Johnson Independent Director
William W. George Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
GOLDMAN SACHS GROUP-6.65%89 825
MORGAN STANLEY3.60%96 214
CHARLES SCHWAB CORPORATION (THE)15.48%79 507
CITIC SECURITIES9.45%35 644
NOMURA HOLDINGS INC-12.39%20 059
HUATAI SECURITIES3.94%18 321