Goldman Sachs Case Flashcards

1
Q

What year was Goldman Sachs founded?

A

1869

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2
Q

What was the original strategy of Goldman Sachs?

A

To provide loans for small businesses, by creating a marketthrough the sale of commercial paper

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3
Q

What did Goldman Sachs start to do in the 1920s?

A

They deliberately used customers for capital gainbyimplementing the use ofthe layered strategy

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4
Q

When did Goldman Sachs become a public company?

A

In May 1999

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5
Q

What new practice did Goldman Sachsintegrateinto their businessmodel in the 1990’s?

A

Laddering

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6
Q

What is Laddering?

A

The action of repeatedly buying shares in a newly launched corporation so as to force up the price, then selling the whole investment at a profit

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7
Q

What did Laddering do to Goldman Sachs’ share price?

A

It caused it to increase from $25 to $75 within 1 day

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8
Q

What did Goldman Sachs start to do by the 2000s?

A

They started to underwrite for eToys

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9
Q

How long after Goldman Sachs began underwriting for eToys did eToys go bankrupt?

A

1 year

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10
Q

What happened to Goldman Sachs when eToys went bankrupt?

A

They received a SEC wells notice for laddering,settling the charges by agreeing to pay a $40 million fine

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11
Q

What did Goldman Sachs’ change from an investment bank to a bank holding company in 2008 do?

A

It brought them under the regulatory of the Federal Reserve Bank instead of the SEC

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12
Q

What did being regulated by the federal reserve bank give Goldman Sachs access to?

A

Federal reserve funds

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13
Q

What did Goldman Sachs’ access to the federal reserve funds allow them to do?

A

Leveraging and more expansion into the mortgage securitization market

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14
Q

What does the SEC requires investment firms to engage in?

A

Fair dealing with its customers

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15
Q

What does the SEC prohibit analysts from doing?

A

Issuing reports on securities that are different from their actual securities

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16
Q

How did Goldman Sachs not follow the SEC requirement’s?

A

They only shared their reports withcompany traders andselect clientele,which differed form analyst’s public reports

17
Q

What happened to Goldman Sachs in April of 2010?

A

The SEC filed a civil action against them for their conduct in a CDO deal known as ABACUS

18
Q

What does the SEC’s complaint against Goldman Sachs allege?

A

That John Paulson choose mortgage pools that were dogs, which would benefit both Paulson and Goldman

19
Q

When did the SEC settle the civil suit with Goldman Sachs?

A

July 16th, 2010

20
Q

What were the details of the SEC’s settlement with Goldman Sachs?

A

Goldman Sachs agreed to pay $550 million in penalties and client reimbursements

21
Q

List the 6 primary people involved in the Goldman Sachs case

A
  1. Attorneys
  2. CEO Lloyd Blankfein
  3. Goldman Sachs
  4. Employees
  5. SEC
  6. John A. Paulson
22
Q

What are the 3 ethical theories involved in the Goldman Sachs case?

A
  1. Utilitarianism
  2. Ethical Egoism
  3. Laura Nash’s 12 questions