Goldman Sachs may soon be forced to divorce executive Fabrice Tourre; but, for certain, Goldman employees and shareholders want to keep their marriage with the investment giant going strong (and for good reasons as we shall see later on in this post, namely, PROFITS!). Tourre, poor sod, is already out on paid leave, but the shit, more than likely, has not hit the fan yet and when it does, he probably will be fired. Says the Wall Street Journal:
In the SEC complaint, Goldman executive Fabrice Tourre was accused of defrauding investors by peddling a financial product the firm knew was doomed to fail as the housing market collapsed. Goldman maintains it has done nothing wrong and is fighting the charges. Mr. Tourre is currently out on indefinite leave, but hasn’t [YET] been suspended by Goldman.
Despite its trouble with the SEC, Goldman is still in good favor with employees and shareholders. That might have something to do with the strong earnings in the last quarter, if the Wall Street Journal’s investigative journalism has it correct, to wit:
Goldman reported a profit of $3.46 billion, or $5.59 a share, up from $1.81 billion, or $3.39 a share, a year earlier. Revenue jumped 36% to $12.78 billion. Analysts polled by Thomson Reuters had most recently forecast earnings of $4.01 a share on $11.07 billion in revenue….Goldman’s staff was paid well for its support. Compensation rose 17% to $5.5 billion from $4.7 billion during the year-earlier period.
The only trouble with this whole thing, is, that it could bring the integrity of the SEC into question, given that, according to the Wall Street Journal, the agency has been split into two factions on account of this charge against Goldman Sachs – Republicans vs. Democrats. Apparently, it was a 3-2 vote in favor of bringing these civil charges against Goldman in the first place – Republicans against, Democrats in favor. So this potential SEC divorce resonates all the way to Washington. It is left to be seen if a “solid” institution like the SEC will be wrecked right along with Tourre, and maybe even Goldman itself, when the dust clears. Although, Blankfein is bullish on the bank, and so, for now, no divorce is imminent for any of the players. Blankfein:
“Our performance in the first quarter reflects more signs of growth across the economy and the strength of our client franchise,” said CEO Lloyd C. Blankfein. “In light of recent events involving the firm, we appreciate the support of our clients and shareholders, and the dedication and commitment of our people.”