Goldman Sachs

The Goldman Sachs Group, Inc. NYSE: GS (referred to as GS, or just Goldman) is an investment bank. The firm was founded in 1869. Headquartered in downtown New York City at 85 Broad Street ([1]), Goldman operates globally with offices in leading financial centers, e.g. New York City, Frankfurt, London, Hong Kong and Tokyo.

Goldman is mostly involved in wholesale financial services, although it has a newer and growing Private Client Services arm. Its largest area of activity is proprietary trading, that is, executing trades for its own profit with its own money. In fact, investment banking accounts for only 5 percent of Goldman's profits.

Quick facts

  • Employed 20,722 people at the end of November 2004.
  • Pre-tax earnings in the 2003 fiscal year ending November 30 were $4.445 billion.
  • The CEO is Hank Paulson.

Lines of Business

Goldman Sachs is divided into three different lines of business: Investment Banking, Trading and Principal Investments, and Asset Management and securities services.

Investment Banking includes traditional investment banking, and mergers and acquisitions (M&A) advisory. Goldman Sachs is one of the leading investment banks, topping the league tables many times, especially in equity operations. In mergers and acquisitions, it gained fame historically by advising clients on how to avoid a hostile takeover. Goldman Sachs, for a long time during the 1980s, was the only major investment bank with a strict policy against helping to initiate a hostile takeover, which increased the firm's reputation immensely. This segment accounts for around 15 percent of Goldman Sach's revenues.

Trading and Principal Investments is the largest segment and profit center for Goldman. This segment consists of the revenues and profit gained from the Bank's trading activities, both on behalf of its clients and for its own account (called proprietary trading). Many trades however are done for both reasons. Most trading done by Goldman is not a "bet" of a particular outcome in the market, but rather attempting to sell something for an incrementally greater amount of money it was forced to buy something for, in the process of acting as a market maker. Like the rest of the Investment Banking industry, this occurs primarily in the bond market. Around 65 percent of Goldman's revenues and profits are from this area. Upon its IPO, Goldman predicted that this segment would not grow as fast as its Investment Banking division and would be responsible for a shrinking proportion of earnings. The opposite has been true, however.

The final segment is Asset Management and securities services. "Asset Management" is an industry term for mutual funds, of which Goldman runs many. This segment accounts for around 19 percent of Goldman's earnings. "Securities services" is mostly a reference to Prime brokerage, which is a stock brokerage for hedge funds that executes many trades and is a particularly profitable division within Goldman Sachs.

History

Goldman Sachs was founded by Marcus Goldman as a business which assisted other businesses in borrowing money via commercial paper (very short term loans). It grew organically from this base, but suffered a major setback when it setup what would be called today a giant hedge fund (Goldman Sachs Trading Co.) in 1929 which crashed in the resulting great depression. This damaged its repuation for a long time.

Sydney Weinberg became the head of Goldman Sachs. He was a relentless salesman, trying to befriend as many leaders of top businesses and governments as possible. His close friendship with the Ford family allowed Goldman Sachs to arrange for the Ford IPO, the largest in the world at that time. This was a major coup for the company which enhanced its reputation greatly. Others at Goldman realized that essentially all new business was brought in from Weinberg, and so instituted an outbound sales force to attempt to become less reliant on Weinberg. This had never been done before in investment banking.

Gustave Levy took over after Weinberg. He came from the firms trading department, and got Goldman Sachs into the business of trading for its own profit (its major source of profit today). John Whitehead and Weinbergs son next took over. They commited Goldman Sachs to expand internationally.

Alumni of Goldman Sachs

Many former partners of Goldman Sachs have gone on to hold prominent public positions including Robert Rubin the United States Secretary of the Treasury under Bill Clinton, Jon Corzine currently a United States Senator from New Jersey, and John Thain currently the CEO of the New York Stock Exchange. Also, Steven Friedman was Chairman of George W. Bush's National Economic Council, incidentally the position Rubin held before moving to Treasury.

Another former partner, Jack Ryan (Senate candidate), withdrew from his bid for the open United States Senate seat in Illinois after embarrassing allegations about his sexual past.

Apart from political careers, alumni of Goldman Sachs seek entrepreneurship and excel there:

  • J Christopher Flowers, a former partner who set up J.C. Flowers & Company, he is a member of the Forbes 400 list.
  • Edward S Lampert, a former protégé of Robert Rubin and founder of ESL Investments, is a member of the Forbes 400.

Scandals involving Goldman Sachs

Joyti De-Laurey

Joyti De-Laurey was convicted eleven to one in April 2004 by a UK jury for stealing more than £4m by forging cheques.

A spokesman for Goldman Sachs described the thefts as "gross abuse of trust and an extremely unpleasant incident for all those affected". The Financial Times called her a "queen of deceit", Scott Mead, the executive whose signature De-Laurey forged, called her a "Picasso of con-men— she was brilliant". Another previous boss of hers, Ron Beller said she was "a very clever con artist". She also worked for Jennifer Beller.

Critics have suggested that the case has been over-stated, as forging cheques does not require exceptional intelligence. Also, claims that forgeries were exceptional are questionable as another witness to the case, Ms. Sophie Pemberton, who is another employee of Mead's, stated that Mead "never signed anything" and that she regularly forged his signature.

De-Laurey's story was made into a television movie broadcast by the BBC on June 8, 2005. Titled The Secretary Who Stole £4 Million, it starred Meera Syal as Joyti De-Laurey, and featured contributions from her friends, family and co-workers.

Misleading analysis of telecommunications companies

In a statement issued by William Donaldson, chairman of the US securities and exchange commission on October 31st 2003, he said Bear Stearns, Credit Suisse First Boston, Goldman Sachs, Lehman Brothers, Merrill Lynch, Piper Jaffray, Salomon Smith Barney, and UBS Warburg (now known as UBS Securities) ("UBS") issued research reports that were not based on principles of fair dealing and good faith and did not provide a sound basis for evaluating facts, contained exaggerated or unwarranted claims about the covered companies, and/or contained opinions for which there were no reasonable bases in violation of New York Stock Exchange ("NYSE") Rules 401, 472 and 476(a)(6), and NASD, Inc., Rules 2110 and 2210 as well as state ethics statutes.

An analyst, Craig Kloner, when asked what his three most important goals for 2000 were, said "to get more investment banking revenue" ([2]) ([3]).

The Financial Times called it "the worst financial scandal in a generation". Donaldson fined Goldman-Sachs US$110m, and the investment banks as a whole $1.4bn ([4]) in the so called "global settlement".

Criticisms against Goldman Sachs

In 2002, Goldman Sachs paid US$ 1.65 million in fines for allegedly violating e-mail record keeping requirements. In 2003, Goldman Sachs paid US$ 110 million as part of the settlement over research improprieties when New York State Attorney General, Eliot Spitzer, fined Wall Street for bad behavior. In 2003, the company agreed to pay US$ 4.3 million in restitution and a US$ 5 million in penalty related to improper trading in US Treasury Securities and futures. In 2004, Goldman Sachs agreed to pay US$ 2 million to the Securities and Exchange Commission (SEC) for settling charges of promoting an IPO before the IPO registration became effective. The SEC also alleged that Goldman Sachs spoke to the media about an IPO by PetroChina before an initial registration was filed. Goldman Sachs also raked in hundreds of millions in fees for underwriting companies like PlanetRx.com, Webvan, etc., which later went bankrupt. Spear Leeds, a firm Goldman Sachs bought in 2000 and renamed as Goldman Sachs Execution & Clearing LP, had to pay US$ 45.3 million to the National Association of Securities Dealers (NASD) in 2004 to settle charges that it traded ahead of customers. In 2005, Goldman Sachs Execution & Clearing LP was fined US$ 1 million by NASD for hiding IPO allocations from the Depository Trust Corporation.

Diversity

Goldman Sachs received a 100% rating on the Corporate Equality Index released by the Human Rights Campaign starting in 2004, the third year of the report. In addition, the company was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.

References

Goldman Sachs: The Culture of Success. Lisa Endlich. Little, Brown and Company. 1999. ISBN 0316643734


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ISBN 0316643734. He actually did that! I thought, 'What should we do? Should we take the ball out, or should we ask him to do it again?' It's still the greatest move I've ever seen in a basketball game, the all-time greatest." -- Magic Johnson on the Baseline Move. 1999. "Here I was, trying to win a championship, and my mouth just dropped open. Little, Brown and Company. Julius was the first player I ever remember who transcended sports and was known by one name -- Doctor." -- his coach Billy Cunningham. Lisa Endlich. He understood what his role was and how important it was for him to conduct himself as a representative of the league.

Goldman Sachs: The Culture of Success. "As a basketball player, Julius was the first to truly take the torch and become the spokesman for the NBA. In addition, the company was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine. This move, along with his free-throw line dunk, has become one of Julius Erving's signature events of his career. Goldman Sachs received a 100% rating on the Corporate Equality Index released by the Human Rights Campaign starting in 2004, the third year of the report. But somehow he managed to reach over and score on a right-handed layup despite the fact that his whole body, including his left shoulder, was already behind the hoop. In 2005, Goldman Sachs Execution & Clearing LP was fined US$ 1 million by NASD for hiding IPO allocations from the Depository Trust Corporation. In mid-air, it was apparent that Erving would land behind the backboard.

Spear Leeds, a firm Goldman Sachs bought in 2000 and renamed as Goldman Sachs Execution & Clearing LP, had to pay US$ 45.3 million to the National Association of Securities Dealers (NASD) in 2004 to settle charges that it traded ahead of customers. Then 7'2" center Kareem Abdul-Jabbar crossed his way, blocking the route to the basket and forcing him outwards. Goldman Sachs also raked in hundreds of millions in fees for underwriting companies like PlanetRx.com, Webvan, etc., which later went bankrupt. He drove past a defender on the right baseline and went up for a layup. The SEC also alleged that Goldman Sachs spoke to the media about an IPO by PetroChina before an initial registration was filed. One of his most memorable plays occured during the 1980 NBA Finals, when he executed a seemingly impossible finger-roll behind the backboard [1]. In 2004, Goldman Sachs agreed to pay US$ 2 million to the Securities and Exchange Commission (SEC) for settling charges of promoting an IPO before the IPO registration became effective. He is revered for his legacy of amazing acrobatic and powerful offensive moves.

In 2003, the company agreed to pay US$ 4.3 million in restitution and a US$ 5 million in penalty related to improper trading in US Treasury Securities and futures. Erving introduced the dunk jumping off the foul line, which he demonstrated in the 1976 All-Star Dunking Contest. In 2003, Goldman Sachs paid US$ 110 million as part of the settlement over research improprieties when New York State Attorney General, Eliot Spitzer, fined Wall Street for bad behavior. Erving was ranked #10 on SLAM Magazine's Top 75 NBA Players of All time in 2003. In 2002, Goldman Sachs paid US$ 1.65 million in fines for allegedly violating e-mail record keeping requirements. In 1997, he joined the front office of the Orlando Magic. Donaldson fined Goldman-Sachs US$110m, and the investment banks as a whole $1.4bn ([4]) in the so called "global settlement". he became a businessman, obtaining ownership of a Coca-Cola bottling plant in Philadelphia and doing work for TV as an analyst.

The Financial Times called it "the worst financial scandal in a generation". After his basketball career, Erving was equally successful. An analyst, Craig Kloner, when asked what his three most important goals for 2000 were, said "to get more investment banking revenue" ([2]) ([3]). As of 2005, Erving ranks fifth on the list; only Kareem Abdul-Jabbar, Wilt Chamberlain, Karl Malone, and Michael Jordan have scored more points in the history of professional basketball. In a statement issued by William Donaldson, chairman of the US securities and exchange commission on October 31st 2003, he said Bear Stearns, Credit Suisse First Boston, Goldman Sachs, Lehman Brothers, Merrill Lynch, Piper Jaffray, Salomon Smith Barney, and UBS Warburg (now known as UBS Securities) ("UBS") issued research reports that were not based on principles of fair dealing and good faith and did not provide a sound basis for evaluating facts, contained exaggerated or unwarranted claims about the covered companies, and/or contained opinions for which there were no reasonable bases in violation of New York Stock Exchange ("NYSE") Rules 401, 472 and 476(a)(6), and NASD, Inc., Rules 2110 and 2210 as well as state ethics statutes. On the combined NBA/ABA scoring list, Erving ranked third with 30,026 points. Titled The Secretary Who Stole £4 Million, it starred Meera Syal as Joyti De-Laurey, and featured contributions from her friends, family and co-workers. When he retired, Erving ranked in the top 10 in scoring (third), most field goals made (third), most field goals attempted (fifth) and most steals (first).

De-Laurey's story was made into a television movie broadcast by the BBC on June 8, 2005. In 1993, Erving was elected to the Naismith Memorial Basketball Hall of Fame. Sophie Pemberton, who is another employee of Mead's, stated that Mead "never signed anything" and that she regularly forged his signature. In his ABA and NBA careers combined, he scored more than 30000 points. Also, claims that forgeries were exceptional are questionable as another witness to the case, Ms. 6 jersey. Critics have suggested that the case has been over-stated, as forging cheques does not require exceptional intelligence. 32 jersey, and the Philadelphia 76ers his No.

She also worked for Jennifer Beller. He is one of the few players in modern basketball to have his number retired by two franchises: the New Jersey Nets (formerly New York Nets) have retired his No. Another previous boss of hers, Ron Beller said she was "a very clever con artist". Erving retired at age 37. The Financial Times called her a "queen of deceit", Scott Mead, the executive whose signature De-Laurey forged, called her a "Picasso of con-men— she was brilliant". In 1986, he announced that he would retire after the season, causing every basketball game he played to be sold out and packed with adoring fans. A spokesman for Goldman Sachs described the thefts as "gross abuse of trust and an extremely unpleasant incident for all those affected". Erving continued his all-star caliber play into his twilight years, averaging 22.4, 20.0, 18.1, and 16.8 points per game in his final seasons.

Joyti De-Laurey was convicted eleven to one in April 2004 by a UK jury for stealing more than £4m by forging cheques. Armed with one of the most lethal center-forward combinations of all time, the Sixers easily won the NBA crown in 1983. Apart from political careers, alumni of Goldman Sachs seek entrepreneurship and excel there:. But then, the Sixers obtained the missing link to combat their weakness at their center position, Moses Malone. Another former partner, Jack Ryan (Senate candidate), withdrew from his bid for the open United States Senate seat in Illinois after embarrassing allegations about his sexual past. Nevertheless, Erving was named the NBA MVP in 1981. Bush's National Economic Council, incidentally the position Rubin held before moving to Treasury. 1981 and 1982 were also sour grapes for Erving, as the Sixers stranded twice, once against the Celtics and once again against the Lakers.

Also, Steven Friedman was Chairman of George W. However, the Lakers won 4-2 with a superb Magic Johnson. Many former partners of Goldman Sachs have gone on to hold prominent public positions including Robert Rubin the United States Secretary of the Treasury under Bill Clinton, Jon Corzine currently a United States Senator from New Jersey, and John Thain currently the CEO of the New York Stock Exchange. There, Erving executed the legendary Baseline Move, an incredible behind-the-board reverse layup and one of the most spectacular basketball moves ever. They commited Goldman Sachs to expand internationally. In 1980 the 76ers prevailed over the Celtics, and went to the NBA Finals against the Los Angeles Lakers. John Whitehead and Weinbergs son next took over. Dr J matchup became the top personal rivalry in the sport, even inspiring the early video game Julius Erving-Larry Bird One-on-One.

He came from the firms trading department, and got Goldman Sachs into the business of trading for its own profit (its major source of profit today). In 1979-1980 Larry Bird had entered the league, reviving the Boston Celtics and the storied Celtics-76ers rivalry; these two teams would face each other in the Eastern Conference Finals for the next four years, and the Bird vs. Gustave Levy took over after Weinberg. In the following years, Erving had to cope with the fact that he himself was a stellar player, but his team simply needed time to grow; they were eliminated twice in the Eastern Conference Finals. This had never been done before in investment banking. However, Erving enjoyed success off the court, becoming one of the first ballers to endorse products and became one of the games' first players to have a shoe marketed under his name. Others at Goldman realized that essentially all new business was brought in from Weinberg, and so instituted an outbound sales force to attempt to become less reliant on Weinberg. After taking a 2-0 lead, the Blazers defeated the Sixers with four straight victories.

This was a major coup for the company which enhanced its reputation greatly. Erving quickly became the leading man of his new club and led them into the NBA Finals against the Portland Trailblazers of Bill Walton. His close friendship with the Ford family allowed Goldman Sachs to arrange for the Ford IPO, the largest in the world at that time. After the merger of the Nets and three other surviving teams into the NBA, Erving had a salary dispute with the Nets and eventually was sold to the Philadelphia 76ers (a move that cost the Nets franchise, soon to relocate to New Jersey, dearly in terms of lost credibility). He was a relentless salesman, trying to befriend as many leaders of top businesses and governments as possible. In his five ABA seasons Erving had won two championships, three MVP trophies, and three scoring titles. Sydney Weinberg became the head of Goldman Sachs. In the postseason, Erving averaged 34.7 points and was named Most Valuable Player of the playoffs.

This damaged its repuation for a long time. The Erving-led Nets defeated the Denver Nuggets in the swansong finals of the ABA. It grew organically from this base, but suffered a major setback when it setup what would be called today a giant hedge fund (Goldman Sachs Trading Co.) in 1929 which crashed in the resulting great depression. By 1976, the ABA was failing under financial pressure. Goldman Sachs was founded by Marcus Goldman as a business which assisted other businesses in borrowing money via commercial paper (very short term loans). His unusual and highly spectacular play single-handedly gave the league fans and credibility. "Securities services" is mostly a reference to Prime brokerage, which is a stock brokerage for hedge funds that executes many trades and is a particularly profitable division within Goldman Sachs. More important than that, Erving established himself not only as the most important Nets player, but as the most important ABA player.

This segment accounts for around 19 percent of Goldman's earnings. Erving had won his first ABA title. "Asset Management" is an industry term for mutual funds, of which Goldman runs many. Erving led the Nets to the ABA Finals against the Utah Stars and vanquished them. The final segment is Asset Management and securities services. Erving was traded to the New York Nets in 1973. The opposite has been true, however. The graceful forward with the trademark Afro was dazzling people with his flashy, exciting style of play, which fit well in the ABA's up-tempo image.

Upon its IPO, Goldman predicted that this segment would not grow as fast as its Investment Banking division and would be responsible for a shrinking proportion of earnings. There, his game flourished, and he achieved a career-best 31.9 points per game. Around 65 percent of Goldman's revenues and profits are from this area. However, he was unhappy there and tried to move to the Atlanta Hawks, until due to legal injunction, he was obliged to return to the Squires in the ABA. Like the rest of the Investment Banking industry, this occurs primarily in the bond market. This move would have brought him together with two other NBA legends, Oscar Robertson and Kareem Abdul-Jabbar. Most trading done by Goldman is not a "bet" of a particular outcome in the market, but rather attempting to sell something for an incrementally greater amount of money it was forced to buy something for, in the process of acting as a market maker. When he became eligible for the NBA draft in 1972, the Milwaukee Bucks picked him in the first round (12th pick overall).

Many trades however are done for both reasons. He led the Squires into the Eastern Division Finals, where they lost to the Rick Barry-led New York Nets. This segment consists of the revenues and profit gained from the Bank's trading activities, both on behalf of its clients and for its own account (called proprietary trading). He scored 27.3 points per game as a rookie, was selected to the All-ABA Second Team, made the ABA All-Rookie Team and finished second to Artis Gilmore for the ABA Rookie of the Year Award. Trading and Principal Investments is the largest segment and profit center for Goldman. Erving quickly established himself as a force, and gaining a reputation for hard and ruthless dunking. This segment accounts for around 15 percent of Goldman Sach's revenues. Erving decided to join the ABA in 1971 and signed as an undergraduate free agent with the ABA's Virginia Squires.

Goldman Sachs, for a long time during the 1980s, was the only major investment bank with a strict policy against helping to initiate a hostile takeover, which increased the firm's reputation immensely. Pro basketball was split into two leagues, the ABA and the NBA, with players rapidly switching clubs and leagues. In mergers and acquisitions, it gained fame historically by advising clients on how to avoid a hostile takeover. At that time, professional basketball was in flux. Goldman Sachs is one of the leading investment banks, topping the league tables many times, especially in equity operations. Nevertheless, he failed to attract much public attention. Investment Banking includes traditional investment banking, and mergers and acquisitions (M&A) advisory. In the two varsity seasons of his college basketball career, he averaged 26.3 points and 20.2 rebounds per game, becoming one of only six players in NCAA Men's Basketball history to average more than 20 points and 20 rebounds per game.

Goldman Sachs is divided into three different lines of business: Investment Banking, Trading and Principal Investments, and Asset Management and securities services. Then he enrolled at the University of Massachusetts in 1968. . It was in that time that he got his nickname "Doctor" for his precision and the way he "operated" on the court. In fact, investment banking accounts for only 5 percent of Goldman's profits. Erving first played basketball at Roosevelt High School. Its largest area of activity is proprietary trading, that is, executing trades for its own profit with its own money. .

Goldman is mostly involved in wholesale financial services, although it has a newer and growing Private Client Services arm. With Michael Jordan, he is considered as one of the most spectacular basketballers ever. New York City, Frankfurt, London, Hong Kong and Tokyo. Erving was named to the NBA's 50th Anniversary All-Time team and was inducted into the Basketball Hall of Fame. Headquartered in downtown New York City at 85 Broad Street ([1]), Goldman operates globally with offices in leading financial centers, e.g. He is the fifth-highing scorer in professional basketball history, with 30,026 points. The firm was founded in 1869. In his professional career with the Virginia Squires and the New York Nets in the ABA, and the Philadelphia 76ers in the NBA, Erving won three championships, four Most Valuable Player Awards, and three scoring titles.

NYSE: GS (referred to as GS, or just Goldman) is an investment bank. He was the main asset of the ABA when it merged with the National Basketball Association after the 1976 season. The Goldman Sachs Group, Inc. was considered "the league". Edward S Lampert, a former protégé of Robert Rubin and founder of ESL Investments, is a member of the Forbes 400. J. Flowers & Company, he is a member of the Forbes 400 list. While some players are considered to be "the team", Dr.

J Christopher Flowers, a former partner who set up J.C. Erving was instrumental in bringing legitimacy to the now-defunct American Basketball Association. The CEO is Hank Paulson. J, is an American basketball player who helped launch the modern style of play that emphasizes leaping ability and play above the rim. Pre-tax earnings in the 2003 fiscal year ending November 30 were $4.445 billion. Julius Winfield Erving III (born February 22, 1950 in Roosevelt, New York), commonly known by the nickname Dr. Employed 20,722 people at the end of November 2004. FT%: .777.

APG: 3.9. RPG: 6.7. PPG: 22.0. Points: 18364.

Games: 836.

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