Goldman Sachs is one of the most prestigious companies in the world. They are a financial institution and provide services to their clients that include investment banking, asset management, and many other financial products.
They have entry level jobs available for people who are looking to break into the world of finance. These positions are entry level and are intended to give you an opportunity to get your foot in the door at Goldman Sachs. With that being said, these positions require some experience working at a bank or investment firm because they want people who have experience with financial products.
Goldman Sachs Entry Level Jobs
The Goldman Sachs Group, Inc. was founded in 1869 and is headquartered at 200 West Street in Lower Manhattan with regional headquarters in London, Warsaw, Bangalore, Hong Kong, Tokyo and Salt Lake City and additional offices in other international financial centers.[2] It ranks 2nd on the list of investment banks in the world by revenue[3] and is ranked 59th on the Fortune 500 list of the largest United States corporations by total revenue.[4] It is considered a systemically important financial institution by the Financial Stability Board.
The company has been criticized for a lack of ethical standards,[5][6] working with dictatorial regimes,[7] cozy relationships with the US federal government via a “revolving door” of former employees,[8] and driving up prices of commodities through futures speculation.[9] While the company has appeared on the 100 Best Companies to Work For list compiled by Fortune, primarily due to its high compensation levels,[10][11] it has also been criticized by its employees for 100-hour work weeks, high levels of employee dissatisfaction among first-year analysts, abusive treatment by superiors, a lack of mental health resources, and extremely high levels of stress in the workplace leading to physical discomfort.[12][13]
The company invests in and arranges financing for startups, and in many cases gets additional business when the companies launch initial public offerings.[14] Notable initial public offerings for which Goldman Sachs was the lead bookrunner include those of Twitter,[15][16] Bumble, Robinhood Markets, among others.[17][18] Startups in which the company or its funds have invested include H2O.ai,[19] Acronis,[20] Amount,[21] among others.[22][23][24][25]
Contents
1 History
1.1 Founding and establishment
1.2 Mid-20th century
1.3 Late 20th century
1.4 21st century
1.5 Subprime mortgage crisis: 2007–2008
1.6 Global Alpha
1.7 2013 onwards
1.8 Move into consumer financial products (2016–present)
2 Services offered
3 Philanthropy
4 Controversies and legal issues
4.1 Role in the financial crisis of 2007-2008
4.2 Sale of Dragon Systems to Lernout & Hauspie despite accounting issues
4.3 Stock price manipulation
4.4 Use of offshore tax havens
4.5 Involvement in the European sovereign debt crisis
4.6 Employees’ views
4.7 Gender bias lawsuit
4.8 Advice to short California bonds underwritten by the firm
4.9 Personnel “revolving-door” with U.S. government
4.10 Insider trading cases
4.10.1 Rajat Gupta insider trading case
4.11 Abacus synthetic CDOs and SEC lawsuit
4.11.1 2010 SEC civil fraud lawsuit
4.11.2 Tourre defense of ABACUS lawsuit
4.12 Alleged commodity price manipulation
4.13 Unauthorized trades by Goldman Sachs trader Matthew Marshall Taylor
4.13.1 Goldman Sachs Commodity Index and the 2005-2008 Food Bubble
4.13.2 Aluminum price and supply
4.13.3 Oil futures speculation
4.14 Danish utility sale (2014)
4.15 Libya investment losses (2013)
4.16 Improper securities lending practices
4.17 Conspiring to allow $1 billion in bribes to obtain business from 1MDB Malaysian sovereign wealth fund (2015-2020)
4.18 Purchase Petróleos de Venezuela bonds (2017)
4.19 Misreporting transactions
4.20 Work culture
5 Political contributions
6 Management
6.1 Officers and directors
6.2 List of chairmen and CEOs
7 Goldman Sachs research papers
8 See also
9 References
10 Further reading
11 External links
History
Founding and establishment
See also: Goldman–Sachs family
Goldman Sachs was founded in New York City in 1869 by Marcus Goldman.[26] In 1882, Goldman’s son-in-law Samuel Sachs joined the firm.[27][28] In 1885, Goldman took his son Henry and his son-in-law Ludwig Dreyfuss into the business and the firm adopted its present name, Goldman Sachs & Co.[29] The company pioneered the use of commercial paper for entrepreneurs and joined the New York Stock Exchange (NYSE) in 1896.[30] By 1898, the firm’s capital stood at $1.6 million.[30]
Goldman entered the initial public offering market in 1906 when it took Sears, Roebuck and Company public.[30] The deal was facilitated by Henry Goldman’s personal friendship with Julius Rosenwald, an owner of Sears.[30] Other IPOs followed, including F. W. Woolworth and Continental Can.[30] In 1912, Henry S. Bowers became the first non-member of the founding family to become a partner of the company and share in its profits.[30]
In 1917, under growing pressure from the other partners in the firm due to his pro-German stance, Henry Goldman resigned.[30] The Sachs family gained full control of the firm until Waddill Catchings joined the company in 1918.[30] By 1928, Catchings was the Goldman partner with the single largest stake in the firm.[30]
On December 4, 1928, the firm launched the Goldman Sachs Trading Corp, a closed-end fund.[31] The fund failed during the Stock Market Crash of 1929, amid accusations that Goldman had engaged in share price manipulation and insider trading.[30]
Mid-20th century
In 1930, the firm ousted Catchings, and Sidney Weinberg assumed the role of senior partner and shifted Goldman’s focus away from trading and toward investment banking.[30] Weinberg’s actions helped to restore some of Goldman’s tarnished reputation. Under Weinberg’s leadership, Goldman was the lead advisor on the Ford Motor Company’s IPO in 1956, a major coup on Wall Street at the time. Under Weinberg’s reign, the firm started an investment research division and a municipal bond department, and it became an early innovator in risk arbitrage.[30]
In the 1950s, Gus Levy joined the firm as a securities trader, where two powers fought for supremacy, one from investment banking and one from securities trading. Levy was a pioneer in block trading and the firm established this trend under his guidance. Due to Weinberg’s heavy influence, the firm formed an investment banking division in 1956 in an attempt to shift focus off Weinberg.[30]
In 1957, the company’s headquarters were relocated to 20 Broad Street, New York City.[30]
In 1969, Levy took over Weinberg’s role as Senior Partner and built Goldman’s trading franchise once again.[32] Levy is credited with Goldman’s famous philosophy of being “long-term greedy,” which implied that as long as money is made over the long term, short-term losses are bearable. At the same time, partners reinvested nearly all of their earnings in the firm.[33] Weinberg remained a senior partner of the firm and died in July of that year.[34]
Another financial crisis for the firm occurred in 1970, when the Penn Central Transportation Company went bankrupt with over $80 million in commercial paper outstanding, most of it issued through Goldman Sachs. The bankruptcy was large, and the resulting lawsuits, notably by the SEC, threatened the partnership capital, life, and reputation of the firm.[35] It was this bankruptcy that resulted in credit ratings for every issuer of commercial paper today by several credit rating services.[36]
Under the direction of Senior Partner Stanley R. Miller, the firm opened its first international office in London in 1970 and created a Private Wealth Management division along with a fixed income division in 1972.[37] It pioneered the “white knight” strategy in 1974 during its attempts to defend Electric Storage Battery against a hostile takeover bid from International Nickel and Goldman’s rival, Morgan Stanley.[38] John L. Weinberg (the son of Sidney Weinberg), and John C. Whitehead assumed roles of co-senior partners in 1976, once again emphasizing the co-leadership at the firm. One of their initiatives was the establishment of 14 business principles that the firm still claims to apply.[39]
Late 20th century
On November 16, 1981, the firm acquired J. Aron & Company, a commodities trading firm which merged with the Fixed Income division to become known as Fixed Income, Currencies, and Commodities.[40] J. Aron was involved in the coffee and gold markets, and the former CEO of Goldman, Lloyd Blankfein, joined the firm as a result of this merger.[41] In 1985, it underwrote the public offering of the real estate investment trust that owned Rockefeller Center, then the largest REIT offering in history.[42] In accordance with the beginning of the dissolution of the Soviet Union, the firm also became involved in facilitating the global privatization movement by advising companies that were spinning off from their parent governments.[43]
In 1986, the firm formed Goldman Sachs Asset Management, which manages the majority of its mutual funds and hedge funds.[44] In the same year, the firm also underwrote the IPO of Microsoft, advised General Electric on its acquisition of RCA,[44] joined the London and Tokyo stock exchanges, and became the first United States bank to rank in the top 10 of mergers and acquisitions in the United Kingdom.[citation needed] During the 1980s, the firm became the first bank to distribute its investment research electronically and created the first public offering of original issue deep-discount bond.[44]
Robert Rubin and Stephen Friedman assumed the co-senior partnership in 1990 and pledged to focus on globalization of the firm to strengthen the merger & acquisition and trading business lines.[45] During their tenure as co-senior partners, the firm introduced paperless trading to the New York Stock Exchange and lead-managed the first-ever global debt offering by a U.S. corporation.[citation needed] In 1994, it also launched the Goldman Sachs Commodity Index (GSCI) and opened its first office in China in Beijing.[46] That same year, Jon Corzine became CEO, following the departure of Rubin and Friedman.[47] Rubin had drawn criticism in Congress for using a Treasury Department account under his personal control to distribute $20 billion to bail out Mexican bonds, of which Goldman was a key distributor.[48] On November 22, 1994, the Mexican Bolsa stock market admitted Goldman Sachs and one other firm to operate on that market.[49] The 1994 economic crisis in Mexico threatened to wipe out the value of Mexico’s bonds held by Goldman Sachs.[50]
In 1994, Goldman financed Rockefeller Center in a deal that allowed it to take an ownership interest[51] in 1996, and sold Rockefeller Center to Tishman Speyer in 2000.[52] In April 1996, Goldman was the lead underwriter of the Yahoo! IPO.[53] In 1998, it was the co-lead manager of the ¥2 trillion (yen) NTT DoCoMo IPO.[54] In 1999, Goldman acquired Hull Trading Company for $531 million.[55][56] After decades of debate among the partners, the company became a public company via an initial public offering in May 1999.[57] Goldman sold 12.6% of the company to the public, and, after the IPO, 48.3% of the company was held by 221 former partners, 21.2% of the company was held by non-partner employees, and the remaining 17.9% was held by retired Goldman partners and two long-time investors, Sumitomo Bank Ltd. and Assn, the investing arm of Kamehameha Schools.[58] The shares were priced at $53 each. After the IPO, Henry Paulson became Chairman and Chief Executive Officer, succeeding Jon Corzine.[59]
21st century
In September 2000, Goldman Sachs purchased Spear, Leeds, & Kellogg, one of the largest specialist firms on the New York Stock Exchange, for $6.3 billion.[60] In January 2000, Goldman, along with Lehman Brothers, was the lead manager for the first internet bond offering for the World Bank.[61] In March 2003, the firm took a 45% stake in a joint venture with JBWere, the Australian investment bank.[61] In April 2003, Goldman acquired The Ayco Company L.P., a fee-based financial counseling service.[62] In December 2005, four years after its report on the emerging “BRIC” economies (Brazil, Russia, India, and China), Goldman Sachs named its “Next Eleven”[63] list of countries, using macroeconomic stability, political maturity, openness of trade and investment policies and quality of education as criteria: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea and Vietnam.[64]
In May 2006, Paulson left the firm to serve as United States Secretary of the Treasury, and Lloyd Blankfein was promoted to Chairman and Chief Executive Officer.[65] In January 2007, Goldman, along with CanWest Global Communications, acquired Alliance Atlantis, the company with the broadcast rights to the CSI franchise.[66]
Subprime mortgage crisis: 2007–2008
As a result of its involvement in securitization during the subprime mortgage crisis, Goldman Sachs suffered during the financial crisis of 2007–2008,[67][68] and it received a $10 billion investment from the United States Department of the Treasury as part of the Troubled Asset Relief Program, a financial bailout created by the Emergency Economic Stabilization Act of 2008. The investment was made in November 2008 and was repaid with interest in June 2009.[69][70]
During the 2007 subprime mortgage crisis, Goldman profited from the collapse in subprime mortgage bonds in summer 2007 by short-selling subprime mortgage-backed securities. Two Goldman traders, Michael Swenson and Josh Birnbaum, are credited with being responsible for the firm’s large profits during the crisis.[71][72] The pair, members of Goldman’s structured products group in New York City, made a profit of $4 billion by “betting” on a collapse in the subprime market and shorting mortgage-related securities. By summer 2007, they persuaded colleagues to see their point of view and convinced skeptical risk management executives.[73] The firm initially avoided large subprime write-downs and achieved a net profit due to significant losses on non-prime securitized loans being offset by gains on short mortgage positions. The firm’s viability was later called into question as the crisis intensified in September 2008.
On October 15, 2007, as the crisis had begun to unravel, Allan Sloan, a senior editor for Fortune magazine, wrote:[74]
So let’s reduce this macro story to human scale. Meet GSAMP Trust 2006-S3, a $494 million drop in the junk-mortgage bucket, part of the more than half-a-trillion dollars of mortgage-backed securities issued last year. We found this issue by asking mortgage mavens to pick the worst deal they knew of that had been floated by a top-tier firm – and this one’s pretty bad.
It was sold by Goldman Sachs – GSAMP originally stood for Goldman Sachs Alternative Mortgage Products but now has become a name itself, like AT&T and 3M.
This issue, which is backed by ultra-risky second-mortgage loans, contains all the elements that facilitated the housing bubble and bust. It’s got speculators searching for quick gains in hot housing markets; it’s got loans that seem to have been made with little or no serious analysis by lenders; and finally, it’s got Wall Street, which churned out mortgage “product” because buyers wanted it. As they say on the Street, “When the ducks quack, feed them.”
On September 21, 2008, Goldman Sachs and Morgan Stanley, the last two major investment banks in the United States, both confirmed that they would become traditional bank holding companies.[75][76] The Federal Reserve’s approval of their bid to become banks ended the business model of an independent securities firm, 75 years after Congress separated them from deposit-taking lenders, and capped weeks of chaos that sent Lehman Brothers into bankruptcy and led to the rushed sale of Merrill Lynch to Bank of America Corp.[77] On September 23, 2008, Berkshire Hathaway agreed to purchase $5 billion in Goldman’s preferred stock, and also received warrants to buy another $5 billion in Goldman’s common stock within five years.[78] The company also raised $5 billion via a public offering of shares at $123 per share.[78] Goldman also received a $10 billion preferred stock investment from the U.S. Treasury in October 2008, as part of the Troubled Asset Relief Program (TARP).[79]
Andrew Cuomo, then New York Attorney General, questioned Goldman’s decision to pay 953 employees bonuses of at least $1 million each after it received TARP funds in 2008.[80] In that same period, however, CEO Lloyd Blankfein and six other senior executives opted to forgo bonuses, stating they believed it was the right thing to do, in light of “the fact that we are part of an industry that’s directly associated with the ongoing economic distress”.[81] Cuomo called the move “appropriate and prudent”, and urged the executives of other banks to follow the firm’s lead and refuse bonus payments.[81] In June 2009, Goldman Sachs repaid the U.S. Treasury’s TARP investment, with 23% interest (in the form of $318 million in preferred dividend payments and $1.418 billion in warrant redemptions).[82] On March 18, 2011, Goldman Sachs received Federal Reserve approval to buy back Berkshire’s preferred stock in Goldman.[83] In December 2009, Goldman announced that its top 30 executives would be paid year-end bonuses in restricted stock that they cannot sell for five years, with clawback provisions.[84][85]
During the 2008 financial crisis, the Federal Reserve introduced a number of short-term credit and liquidity facilities to help stabilize markets. Some of the transactions under these facilities provided liquidity to institutions whose disorderly failure could have severely stressed an already fragile financial system.[86] Goldman Sachs was one of the heaviest users of these loan facilities, taking out many loans between March 18, 2008, and April 22, 2009. The Primary Dealer Credit Facility (PDCF), the first Fed facility ever to provide overnight loans to investment banks, loaned Goldman Sachs a total of $589 billion against collateral such as corporate market instruments and mortgage-backed securities.[87] The Term Securities Lending Facility (TSLF), which allows primary dealers to borrow liquid Treasury securities for one month in exchange for less liquid collateral, loaned Goldman Sachs a total of $193 billion.[88] Goldman Sachs’s borrowings totaled $782 billion in hundreds of revolving transactions over these months.[89] The loans were fully repaid in accordance with the terms of the facilities.[90]
In 2008, Goldman Sachs started a “Returnship” internship program after research and consulting with other firms led them to understand that career breaks happen and that returning to the workforce was difficult, especially for women. The goal of the Returnship program was to offer a chance at temporary employment for workers. Goldman Sachs holds the trademark for the term ‘Returnship’.[91]
According to a 2009 BrandAsset Valuator survey taken of 17,000 people nationwide, the firm’s reputation suffered in 2008 and 2009, and rival Morgan Stanley was respected more than Goldman Sachs, a reversal of the sentiment in 2006. Goldman refused to comment on the findings.[92] In 2011, Goldman took full control of JBWere in a $1 billion buyout.[93]
Global Alpha
According to The Wall Street Journal, in September 2011, Goldman Sachs, announced that it was shutting down its largest hedge fund[94]—Global Alpha Fund LP—which had been housed under Goldman Sachs Asset Management (GSAM).[95] Global Alpha, which was created in the mid-1990s with $10 million,[96] was once “one of the biggest and best performing hedge funds in the world” with more than $12 billion assets under management (AUM) at its peak in 2007.[97] Global Alpha, which used computer-driven models to invest,[94] became known for high-frequency trading and furthered the career of quantitative analysts—’quants’—such as Cliff Asness and Mark Carhart, who were the quant fund’s founding fathers and had developed the statistical models that drove the trading.[96] The Wall Street Journal described Asness and Carhart as managers of Global Alpha, a “big, secretive hedge fund”—the “Cadillac of a fleet of alternative investments” that had made millions for Goldman Sachs by 2006.[98] By mid-2008 the quant fund had declined to 2.5 billion, by June 2011, it was less than $1.7 billion, and by September 2011, after suffering losses that year, it had “about $1 billion AUM.[99]
2013 onwards
2013 was a very busy year for the company. Goldman underwrote the $2.913 billion Grand Parkway System Toll Revenue Bond offering for the Houston, Texas area, one of the fastest-growing areas in the United States. The bond will be repaid from toll revenue.[100][101]
In April 2013, together with Deutsche Bank, Goldman led a $17 billion bond offering by Apple Inc., the largest corporate-bond deal in history[102][103] and Apple’s first since 1996. Goldman Sachs managed both of Apple’s previous bond offerings in the 1990s.[103]
In June 2013, Goldman Sachs purchased the loan portfolio from Brisbane-based Suncorp Group, one of Australia’s largest banks and insurance companies. The A$1.6 billion face amount loan portfolio was purchased for A$960 million.[104][105]
In September 2013, Goldman Sachs Asset Management announced it had entered into an agreement with Deutsche Asset & Wealth Management to acquire its stable value business, with total assets under supervision of $21.6 billion as of June 30, 2013.[106]
In August 2015, Goldman Sachs agreed to acquire General Electric’s GE Capital Bank on-line deposit platform, including US$8-billion of on-line deposits and another US$8-billion of brokered certificates of deposit.[107]
Move into consumer financial products (2016–present)
Logo of Marcus by Goldman Sachs
Starting in 2016, Goldman Sachs has started to move into consumer financial products after spending most of its prior 150 years catering to institutional investors, corporations and governments.[108]
In April 2016, Goldman Sachs launched GS Bank, a direct bank.[109] In October 2016, Goldman Sachs Bank USA started offering no-fee unsecured personal loans under the brand Marcus by Goldman Sachs.[110] In March 2016, Goldman Sachs agreed to acquire financial technology startup Honest Dollar, a digital retirement savings tool founded by American entrepreneur Whurley, focused on helping small-business employees and self-employed workers obtain affordable retirement plans. Terms of the deal were not disclosed.[111]
In May 2017, Goldman Sachs purchased $2.8 billion of PDVSA 2022 bonds from the Central Bank of Venezuela during the 2017 Venezuelan protests.[112]
In April 2018, Goldman Sachs acquired Clarity Money, a personal finance startup.[113] On September 10, 2018, Goldman Sachs acquired Boyd Corporation from Genstar Capital for $3 billion.[114] On May 16, 2019, Goldman Sachs acquired United Capital Financial Advisers, LLC for $750 million.[115]
Example of physical Apple Card, issued by Goldman Sachs
In March 2019, Apple, Inc. announced that it would partner with Goldman Sachs to launch the Apple Card, the bank’s first credit card offering.[108] The card features a number of consumer-friendly features including no fees, software that encourages users to avoid debt or pay it down quickly, the industry’s lowest interest rate range for comparable cards, and a mandate to approve as many iPhone users as possible. These features are seen as being risky for a bank to take on, and led other banks with established consumer credit card operations including Apple’s long time partner Barclays, along with Citigroup, JPMorgan Chase and Synchrony, to turn down Apple’s proposal.[116][117] Goldman Sachs defended the terms of the deal saying they were “thrilled” with the partnership and seeking “to disrupt consumer finance by putting the customer first.”[116]
In December 2019, the company pledged to give $750 billion to climate transition projects and to stop financing for oil exploration in the Arctic and for some projects related to coal.[118]
In June 2020, Goldman Sachs introduced a new corporate typeface, Goldman Sans, and made it freely available. After Internet users discovered that the terms of the license prohibited the disparagement of Goldman Sachs, the bank was much mocked and disparaged in its own font, until it eventually changed the license to the standard SIL Open Font License.[119]
Goldman Sachs was embroiled in a major scandal related to Malaysia’s sovereign wealth fund, 1Malaysia Development Berhad (1MDB). The bank paid a fine of $2.9 billion under the Foreign Corrupt Practices Act, the largest such fine of all time. In July 2020, Goldman Sachs agreed on a $3.9 billion settlement in Malaysia for criminal charges related to the 1MDB scandal.[120][121] For charges brought for the same case in other countries, Goldman Sachs agreed in October of the same year to pay more than $2.9 billion, with over $2 billion going to fines imposed in the US.[122][123]
In August 2021, Goldman Sachs announced that it had agreed to acquire NN Investment Partners, which had US$335 billion in assets under management, for €1.7 billion from NN Group.[124]
In September 2021, Goldman Sachs announced to acquire GreenSky for about $2.24 billion and completed the acquisition in March 2022.[125]
In March 2022, Goldman Sachs announced it was winding down its business in Russia in compliance with regulatory and licensing requirements.[126]
Also during that same month, Goldman Sachs announced it had acquired the Chicago-based open-architecture digital retirement advice provider, NextCapital Group.[127]
In June 2022, Goldman Sachs offered its first ever derivatives product linked to Ether (ETH).[128]
