“Long-Term Greedy”* . . . Minus the “Long-Term”

“Our employees shouldn’t expect the firm to pay for their defense when they steal from us.”

–Goldman Sachs spokesman, explaining the company’s refusal to pay the legal fees of software programmer (and former Goldman Sachs Vice President) Sergey Aleynikov; “At Goldman Sachs, Even the Legal Fees are Different”; The NYT (9/6/2014)

Fair enough.

After all, what company would voluntarily pay the legal fees of a former employee alleged to have stolen from it?

hushBut, then what are we to make of the 51(!) employees whose legal fees Goldman deigned to pay over a recent six-year period, according to the NYT?

Apparently, if you are alleged to have stolen for Goldman Sachs rather than from it . . . you’re covered.

For a fuller explanation of Goldman Sachs’ rather dogged pursuit of Mr. Aleynikov, see Michael Lewis’ “The Big Short” (spoiler alert:  Goldman Sachs doesn’t come away looking like the good guy).

Legal Hush Money

Mr. Aleynikov’s (mis)deeds aside, the real crime is that no senior executives at Goldman — or any other Wall Street investment banking firm — have ever been held accountable for their role in The Crash of 2008.

There’s a veritable catalog of reasons why, but Morgenson’s piece adds another:  any Goldman Sachs employee who dared to testify against the firm would be quickly crushed by legal fees (and presumably suffer instant professional exile).

Or as a (very) politic Morgenson puts it:  ‘no firm manages its employees’ incentives more shrewdly than Goldman.”

P.S.:  What other industry besides Wall Street gets away with requiring its employees to waive their right to legal action and instead have their grievances heard by industry-friendly arbitrators?

Answer:  none.

*Goldman Sachs’ one-time business mantra.  See also, “Goldman Sachs:  ‘It’s Not My Dog.'”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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