This article documents what is probably merely the tip of the iceberg in the case against Goldman Sachs.–t.h.g.
An executive at Goldman Sachs left the firm today with a bang, penning a New York Times op-ed accusing the company of increasingly putting profits ahead of clients. Greg Smith started as an intern 12 years ago and last headed a derivatives department. Not surprisingly, Goldman quickly and strongly disagreed with his take.
There have obviously been plenty of unflattering headlines about Goldman in the past few years. We decided to look at just one aspect of their record: SEC charges levied against Goldman and its employees over the past decade.
April 2003: SEC charges Goldman Sachs over conflicts of interest among its research analysts. The company eventually settled for $110 million in fines and disgorgements.
November 2003: Former Goldman economist John Youngdahl pleads guilty to insider trading. The firm had to pay the SEC $4.2 million over profits it gained from the illegal dealings.
July 2004: Goldman settles with the SEC for $10 million over charges it improperly promoted a stock sale involving PetroChina.
January 2005: Goldman settles with the SEC for $40 million over charges that it violated securities law in promoting initial public offerings.
April 2006: Two former Goldman employees are charged with running an international insider-trading ring while they were at the firm. Eugene Plotkin and David Pajcin, both in their 20s, paid off insiders at other firms and stole early copies of Business Week to get an edge. They also tried (unsuccessfully) to use strippers to get information. Both eventually served jail time.
March 2007: A Goldman subsidiary, Goldman Execution and Clearing, settles with the SEC for $2 million over allegations that faulty oversight that allowed customers to make illegal trades.
March 2009: Goldman Execution and Clearing settles with the SEC for $1.2 million over improper proprietary trading by employees.
July 2009: The SEC charges a former Goldman Sachs trader Anthony Perez and his brother with insider trading based on information Anthony Perez obtained through his job at Goldman Sachs. He was fined $25,000 and his brother more than $150,000.
May 2010: The SEC hits Goldman Execution and Clearing with a $225,000 fine for violating a rule aimed at regulating short selling.
July 2010: Goldman settles with the SEC for $553 million over allegations that it misled investors about the collateralized debt obligation ABACUS 2007-AC1 by not disclosing the involvement of a hedge fund in its creation, or the fact that the hedge fund stood to benefit if the CDO failed. Goldman executive Fabrice Tourre was also charged.
March 2011: The SEC charges Goldman board member Rajat Gupta with insider trading. Gupta allegedly passed on information he learned as a board member to the hedge fund Galleon Group. In October, 2011, he was arrested and hit with criminal charges by the FBI. The case is pending.
September 2011: The SEC charges a Goldman employee, Spencer Midlin, and his father for insider trading based on information Spencer Midlin gained from his position at Goldman Sachs. The two men were ordered to pay $92,000.
February 2012: Goldman Sachs receives notice from the SEC that the agency may bring charges related to mortgage backed-securities.
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