Ex-Goldman Sachs employees bring trial and a book
Are a pair of former mid-level executives at Goldman Sachs about to get a measure of revenge?
Fabrice "Fab" Tourre was the only individual employee at Goldman Sachs who was charged as part of the much-ballyhooed SEC enforcement action aimed at the bank's infamous ABACUS CDO sales and marketing practices, which was eventually settled for $550 million.
After lots of legal skirmishing, Tourre has finally been given a July 2013. While the issues now seem a bit dated, it will be interesting to see what Tourre's defense will be vis-à-vis other Goldman Sachs executives. We may see a few called to testify. Tourre's team may well argue that higher ups at the bank knew exactly what he was doing, and that prosecutors in a sense have the wrong man on trial.
In a different vein, Greg Smith, who infamously resigned with a scathing op-ed piece in the New York Times, has penned a book called Why I left Goldman Sachs, which will be on sale starting October 22. The book will no doubt expand Smith's theme that that culture of Goldman Sachs has progressively worsened to the point that customers are now treated cavalierly and scant respect.
The Financial Times reports that the bank is already in damage-control mode. It has made clear that it looked into the allegations and statements made by Smith and found them lacking in some cases. For example, "a description of his book says Mr. Smith warned nine Goldman partners that he had concerns about the company's culture. Those reviewing the allegations said they found no evidence that he had reported concerns to any senior manager apart from once, two days before his resignation, after he had already written his opinion article."
The bank is also making clear that Smith sought a bigger bonus before he left and was roundly denied, so there may be some sour grapes involved. Smith never made MD.
It will be interesting to see how the book is received when it comes out.
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