Goldman Sachs is one of of the oldest and best multinational investment banking firms around. The company brings in billions each year but has also had their fair share of scandals occur since they were founded in 1869. While some of these have been quiet and relatively minor offenses, Goldman Sachs has also faced lots of largely public scandals that have caused the company to deal with a decent amount of controversy. Here are the biggest scandals in the history of Goldman Sachs.
5. Neil Morrison being charged by the SEC
Former Goldman Sachs Vice President, Neil Morrison, was actually at one point charged by the SEC for participating in (at the time) state treasurer Timothy Cahill’s bid for governor. Morrison tried to get bond business for his company and as a result of this was hit with a $100,000 fine and not aloud to handle any securities trading for five years.
4. Greg Smith saying employees called clients “muppets”
When Greg Smith left Goldman Sachs, he started writing about all of the cultural changes that the company made which he didn’t agree with. Smith trashed the current employees claiming they were all morally bankrupt people who called their clients “muppets” because they just controlled them to make money for themselves.
3. Aiding in the financial downfall of Greece
Greece’s financial problems have been a constant mess, and big firms have been doing everything they can to help, but Goldman Sachs sent a group of employees over to suggest a system that would get rid of all the debt and help people pay off mortgages and credit. The investment firms began to allow the country as a whole to borrow more than they could afford and ended up sinking Greece further into debt.
2. The Synthetic CDOs Scandal
Goldman Sachs helped sell a synthetic CDO company to investors but didn’t mention that John Paulson (an employee at the time) chose the composition of the CDOs. The company ended up having to pay $550 million in settlement and one former employee even went on trial for everything.
1. Receiving taxpayer money through AIG
Back when AIG was in horrible financial trouble and almost went bankrupt, the United States Government bailed the company out. The company had sold all credit default swaps to Goldman Sachs who ended up receiving billions in taxpayer money for the bailout of AIG.
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