The Ethical Barometer

Since the Greg Smith letter of resignation from Goldman Sachs via the op-ed page of the New York Times, Wall Street has been on defense. Well, more accurately, Wall Street has been in full rationalization/justification/”it’s just what we do” mode. Herewith a few of the classics:
• “Instead of ‘examining’ unprovable accusations, Goldman and other banks should ditch the ‘clients-first’ mantra they constantly recite and state clearly what they are about.” (Wall Street Journal columnist, Francesco Guerrera) Okay, here goes, the new approach to clients: “We’re in it for the money, not you, and we don’t make any bones about it, so invest with us.”
• “Banks aren’t charities—they should have said Continue reading →

He was a 33-year-old executive director (equivalent of a vice president at a bank) at Goldman Sachs in London, Of course Goldman has 12,000 executive directors among its 33,000 employees, so he is a worker bee. “He” is Greg Smith and he had an op-ed piece in the March 15, 2012 issue of the New York Times. The piece describes Goldman’s callous attitude toward clients and calls the Goldman culture “toxic and destructive.” So, and? Tell us something we did not know.

The response to the piece is fascinating. The only denials are coming from within Goldman. One client said that the letter was “naïve,” and added, “Come on. that is what they do and they are good traders, so I do business with them.” Another client Continue reading →

You can’t make up this stuff. William Bryan Jennings (fun parents with a little name play on William Jennings Bryan, who, ironically for this story and namesake, was known as “The Great Commoner”), a managing director at Morgan Stanley in the fixed income division, was placed on leave after a cab driver accused Mr. Jennings of stabbing him Continue reading →

As early as 2009, Rating & Investment Information, Inc. (R & I) warned in its newsletter that ALJ Investment Advisors Co. , an asset management firm, had “unnaturally stable returns.” That is, despite what was happening in the market, ALJ was always 5 -10%. During the same period, other investment firms never posted more than three consecutive years of positive returns. R & I called ALJ a “Japanese Madoff,” and discussed its concerns with Japanese regulators. No one took any action, including the pension plan beneficiaries whose assets were managed by ALJ. If it sounds too good to be true, and an asset management firm is defying the market, pause, think, investigate, and proceed to collecting your dough. But, for 2 years, Continue reading →

Albert “Jack” Stanley in explaining to his sentencing judge what made him bribe Nigerian officials in order to win contracts for Halliburton’s subsidiary, KBR. Prosecutors had recommended 7 years; he was sentenced to 30 months.

The 800-page-report on the Atlanta Public School System that emerged in July 2011 explained what happened in that city with testing. Scores were good; kids couldn’t read. A culture of numbers (test scores mattered – learning did not), a culture of pressure (teachers and principals who did not meet their numbers were fired (90% of the principals were removed)), an iconic leader (Beverly Hall won awards for those scores Continue reading →

New York Knicks coach, Mike D’Antoni on point guard, Jeremy Lin. Sure you can, coach — a strong work ethic, humility, the drive to keep going even when you get a rejection here and there, and a focus on something other than the next tattoo. Dear coach — good parents teach these things every day. Perhaps the moral of the Lin story is that your recruiting prism is flawed. The heart does indeed matter.

Those Goldman boys have the golden touch, as long as they can operate on all sides. Goldman helped take Kinder Morgan private in 2006. Goldman owns 19.1% of Kinder Morgan. Goldman handled Kinder Morgan’s IPO in 2011. Goldman represented Kinder Morgan in its acquisition of El Paso Corporation. Goldman also represents El Paso in exploring possible spinoffs of some of its operations.

When all these roles came to light, never fear, dear reader, Goldman’s two directors on Kinder Morgan’s board Continue reading →