Tags: US | Goldman | Sachs | Meeting

Goldman Sachs to Create a Standards Committee

Friday, 07 May 2010 10:59 AM


Goldman Sachs' embattled Chairman and CEO Lloyd Blankfein told investors Friday that the firm is creating a business standards committee to study the bank's practices in the wake of the civil fraud suit launched by the Securities and Exchange Commission and the criminal probe opened by the Justice Department.

"We need a rigorous self-examination," Blankfein told investors gathered at the annual shareholders' meeting Friday, held a few blocks away from the investment firm's global headquarters in New York. "Our firm must review our core principles."

He noted there's been a disconnect between how the company views itself and how outsiders view the firm. The committee, which will report to the board of directors, will review both services and products that Goldman Sachs offers.

Blankfein is facing scrutiny from investors amid the much publicized charges launched last month. He's expected to defend the company while vigorously trying to save his job. Investors also are looking to hear any comments from the top brass about whether Goldman Sachs has begun settlement talks with the SEC. The Wall Street Journal reported on Friday that company lawyers met with SEC officials this week in a first move toward a potential settlement, though the two sides remain far apart. The newspaper quoted unnamed sources familiar with the matter.

Shares of Goldman have been down more than 20 percent since the SEC announced the charges last month. They grew out of a 2007 transaction involving collateralized debt obligations, or CDOs — complex mortgage-related securities that many analysts say helped accelerate the financial crisis and the Great Recession when they dramatically fell in value. The government said Goldman did not divulge to two clients that the CDOs they purchased were created in part by billionaire hedge fund manager John Paulson, who was betting on them to fail. Goldman has denied any wrongdoing and said that it lost money on that particular deal.

As for the criminal investigation, announced last week, the probe is in preliminary stages and could end without any charges being filed. Goldman Sachs is also facing multiple shareholder and class-action suits that have been filed since the SEC announced its charges.

According to published reports, settlement charges could range anywhere from $1 billion to $5 billion. But what's really at stake is Goldman Sach's reputation, which has been tarnished since the launch of the SEC charges.

Goldman's power during the financial crisis and the prominence of many former Goldman executives have made the firm a lightning-rod for public outcry over Wall Street's greed and risky behavior. Even before the SEC announcement last month, the bank, both reviled and admired, was defending accusations that its bets helped fuel the financial crisis.

Goldman also has become a scapegoat for Democrats in the increasing debate over the financial overhaul.

Four days after being accused of fraud by the SEC, the bank reported stellar first-quarter profits of $3.3 billion, nearly double from the same period a year ago.

In morning trading, shares of Goldman Sachs rose 98 cents to $143.30.

© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Alabama Group: Some Judges Might Give Same-sex Marriage Licenses

Sunday, 25 Jan 2015 17:29 PM

The association representing Alabama's probate judges says it's possible some judges there may issue marriage licenses t . . .

'Potentially Historic' Storm Headed for Northeast

Sunday, 25 Jan 2015 17:20 PM

A potentially historic storm could dump 2 to 3 feet of snow from northern New Jersey to Connecticut starting Monday, c . . .

Two Dead in Apparent Murder-suicide at NYC Home Depot -NYPD

Sunday, 25 Jan 2015 17:12 PM

Two people were killed after a shooting in a Home Depot store in Manhattan's Chelsea neighborhood on Sunday afternoon in . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved