Goldman Sachs Case Summary
Brief Case Summary
1) The case looks at the unethical and illegal fraud committed by Goldman, Sachs & Co. as part of a major securities fraud that took place in early 2007. Goldman Sachs is an investment banking firm headquartered in New York.
2) The Securities and Exchange Commission (SEC) alleged that Goldman Sachs acted unethically by providing investors with misleading information related to a collateral debt obligation (CDO) which was linked to the performance of subprime residential mortgage backed securities (RMBS).
Connection to Our Topic: Companies who are led by CEOs who are also company founders or who act like the company belongs to them are more likely to commit unethical acts
1) The case is not directly linked to our topic because of the absence of a founder CEO of the company in focus here, Goldman Sachs.
2) Despite this situation, there are instances of unethical acts committed by top executives at the firm which provides us a reliable overview of the motives and incentives that eventually lead to such actions some of which can be related to the unethical acts committed by founder CEOs and their motives for doing so.
3) The alleged unethical acts in the case and the actions leading up to it are summarized below:
I. Paulson and CO. Inc. a hedge fund founded in 1994, as a result of extensive analysis it had correctly predicted a significant fall in value of RMBS and was looking into possible transactions to find counterparties to its planned short position and this is where Goldman Sachs comes in.
II. Goldman Sachs set up a RMBS portfolio, the underlying assets were picked by Paulson but it was portrayed to investors that the assets were actually picked by ACA Management LLC a reputed firm that was experience with RMBS.
III. It was portrayed to the investors by Goldman Sachs that the assets in the RMBS portfolio were picked by ACA and failed to mention he active role that Paulson played in the process.
IV. Goldman Sachs failed to mention the
1) The case looks at the unethical and illegal fraud committed by Goldman, Sachs & Co. as part of a major securities fraud that took place in early 2007. Goldman Sachs is an investment banking firm headquartered in New York.
2) The Securities and Exchange Commission (SEC) alleged that Goldman Sachs acted unethically by providing investors with misleading information related to a collateral debt obligation (CDO) which was linked to the performance of subprime residential mortgage backed securities (RMBS).
Connection to Our Topic: Companies who are led by CEOs who are also company founders or who act like the company belongs to them are more likely to commit unethical acts
1) The case is not directly linked to our topic because of the absence of a founder CEO of the company in focus here, Goldman Sachs.
2) Despite this situation, there are instances of unethical acts committed by top executives at the firm which provides us a reliable overview of the motives and incentives that eventually lead to such actions some of which can be related to the unethical acts committed by founder CEOs and their motives for doing so.
3) The alleged unethical acts in the case and the actions leading up to it are summarized below:
I. Paulson and CO. Inc. a hedge fund founded in 1994, as a result of extensive analysis it had correctly predicted a significant fall in value of RMBS and was looking into possible transactions to find counterparties to its planned short position and this is where Goldman Sachs comes in.
II. Goldman Sachs set up a RMBS portfolio, the underlying assets were picked by Paulson but it was portrayed to investors that the assets were actually picked by ACA Management LLC a reputed firm that was experience with RMBS.
III. It was portrayed to the investors by Goldman Sachs that the assets in the RMBS portfolio were picked by ACA and failed to mention he active role that Paulson played in the process.
IV. Goldman Sachs failed to mention the