Goldman Sachs ‘sweetener’ row (NEW FINANCIAL SCANDAL)

The Sunday Times ^ | November 24, 2002 | Sunday Times

[MadIvan]

ONE of the world’s biggest investment banks, Goldman Sachs, faces a probe into allegations that it engaged in some of the unethical business practices in London that have shaken Wall Street.

MPs last night demanded an investigation by the Financial Services Authority (FSA), the City watchdog, after evidence emerged suggesting Goldman’s London office had issued cheap shares to favoured clients at the height of the stock market boom. Ordinary investors got access to the shares only after their value had started to soar.

In one flotation organised by Goldman’s in April 2000, two long-term clients were allocated shares which immediately jumped in value by 150%. The pair made a profit of nearly £500,000. The following month Goldman’s made millions in fees when it floated their firm on the London stock market.

On Wall Street, the same alleged behaviour, known as “spinning”, has led to inquiries against Goldman’s and other investment banks by New York prosecutors. The banks are also being pursued through the civil courts by private investors forced to buy shares in the same flotations at higher prices.

The Sunday Times has also obtained internal e-mails from Goldman’s that suggest the bank’s analysts regarded advice they were giving on the future value of certain telecoms shares as “ridiculous”. The e-mails also imply researchers were under pressure to back firms whose executives provided millions of pounds in fees.

Yesterday John McFall, chairman of the Commons Treasury committee, said he would be contacting Sir Howard Davies, the FSA’s executive chairman, to urge him to collect all evidence that might expose any questionable practices in the City. “What The Sunday Times has uncovered is worthy of further investigation,” he said.

The government has hesitated to order an in-depth inquiry into spinning, citing a lack of evidence. Last night an FSA spokesman said it would examine the new material “as part of ongoing inquiries”.

Goldman denies its advice to investors has ever been influenced by pressure from clients. It also denies giving any special treatment in the allocation of shares in stock floatations.

[MadIvan]

The most unethical of my classmates at my university went into investment banking. (Now) Senator Corzine was once at Goldman Sachs. Now this. Coincidence?

Regards, Ivan

[MadIvan]

Bump!

[Mo1]

FYI ....

Hmmmmm ... And who use to work for Goldman Sachs

[mware]

You went to school with Senator Daddy Warbucks??????

[MadIvan]

No no no, my most unethical classmates went into investment banking. Senator Corzine, like them, is an unethical scumbag. I don't know Senator Corzine, and I don't care to know him.

Regards, Ivan

[mware]

Lucky you Ivan, I got that crook as my senator for the next 4 years.

[MadIvan]

To my mind, he is the worst sort of person: a fellow who got filthy rich and now doing his damndest to make sure no one else achieves the same.

Say, didn't Rubin work at Goldman Sachs too?

Regards, Ivan

[NativeNewYorker]

Rubin RAN Goldman.

[OReilly]

I went to university with Goldman Sacks's Vice Chairman, Robert (whatever his last name was). His dad got him the job. He had little to do as a real job, in the last 30 some years (since he started at the top), other than to run over to CNN (when needed, to comment on a Wall Street Story, as a knowledgeable insider).

[mware]

I think Rubin is tied to Citibank. During the Enron investigation he was the one who attempted to get someone in the Treasury Dept. to stall on changing Enrons ratings.

[Gritty]

Goldman Sachs.

Hmmmm...

Isn't that the outfit Senator John Corzine (D-NJ) used to run?

Why isn't this news a "surprise"?

[txzman]

And this country puts felons who are convicted of stealing from stores 3 times in jail for life. Bank robbers, even those without weapons, frequently do 10-15 years.

Anyone want to bet what these crooks will do? And people still scoff at eventual revolution in the West? Just let society breakdown for a week.....

[aristeides]

Bob Rubin preceded Corzine as head of Goldman Sachs.

[aristeides]

Rubin's at Citi now, but before his stint with the Clinton administration he was head of Goldman Sachs.

[mware]

Somewhere in that spider web he is linked to Worldcom too. This of couse being us to Terrible Terry, who is linked with Hillary who is married to Bubba.

There is your 6 degrees of seperation.

[OReilly]

I just did a google search on "Goldman Sachs Vice Chairman" and did not realize the they had so many. The Robert, I went to university with, was Robert Hormatz. Can't vouch for his correctitude, as he joined the fraternity with the most extensive exam files. (and this before it was a common thing)

[OldFriend]

Corzine was such a piece of garbage that even Goldman Sach's didn't want him on their payroll any longer.

[Dog Gone]

There is NO doubt that this is true. I have personally seen the favoritism at Goldman Sachs. That this occurred is a given.

[KevinDavis]

I wonder if the democrats are going to blame this on Bush??