Goldman Sachs Case Flashcards
What year was Goldman Sachs founded?
1869
What was the original strategy of Goldman Sachs?
To provide loans for small businesses, by creating a marketthrough the sale of commercial paper
What did Goldman Sachs start to do in the 1920s?
They deliberately used customers for capital gainbyimplementing the use ofthe layered strategy
When did Goldman Sachs become a public company?
In May 1999
What new practice did Goldman Sachsintegrateinto their businessmodel in the 1990’s?
Laddering
What is Laddering?
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
What did Laddering do to Goldman Sachs’ share price?
It caused it to increase from $25 to $75 within 1 day
What did Goldman Sachs start to do by the 2000s?
They started to underwrite for eToys
How long after Goldman Sachs began underwriting for eToys did eToys go bankrupt?
1 year
What happened to Goldman Sachs when eToys went bankrupt?
They received a SEC wells notice for laddering,settling the charges by agreeing to pay a $40 million fine
What did Goldman Sachs’ change from an investment bank to a bank holding company in 2008 do?
It brought them under the regulatory of the Federal Reserve Bank instead of the SEC
What did being regulated by the federal reserve bank give Goldman Sachs access to?
Federal reserve funds
What did Goldman Sachs’ access to the federal reserve funds allow them to do?
Leveraging and more expansion into the mortgage securitization market
What does the SEC requires investment firms to engage in?
Fair dealing with its customers
What does the SEC prohibit analysts from doing?
Issuing reports on securities that are different from their actual securities
