Goldman Sachs 2.2 Billion
March 17, 2012 by staff
Goldman Sachs 2.2 Billion, Goldman Sachs Group Inc saw $2.15 billion of its market value wiped out after an employee assailed Chief Executive Officer Lloyd C. Blankfein’s management and the company’s treatment of clients, sparking debate across Wall Street.
The shares dropped 3.4 percent in New York trading on Wednesday, the third-biggest decline in the 81-company Standard & Poor’s 500 Financials Index, after London-based Greg Smith made the accusations in a New York Times op-ed piece.
Smith, who also wrote that he was quitting after 12 years at the company, blamed Blankfein and President Gary D. Cohn for a “decline in the firm’s moral fiber”. They responded in a memo to current and former employees, saying that Smith’s assertions don’t reflect the company’s values, culture or “how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients”.
Former Federal Reserve chairman Paul Volcker, whose “Volcker rule” would limit banks such as New York-based Goldman Sachs from making bets with their own money, called Smith’s article “a radical, strong” piece. “I’m afraid it’s a business that leads to a lot of conflicts of interest,” Volcker said at a conference in Washington sponsored by the Atlantic.
Goldman Sachs slid $4.17 to $120.37 on Wednesday. The shares are still up 33 percent this year.
David Wells, a spokesman for Goldman Sachs in New York, declined to comment beyond the contents of the memo and an earlier e-mailed statement in which the company said it disagrees with the views expressed in the op-ed.
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