Like Toyota, damage control could backfire on Goldman

Let the whole story out, come clean with what happened, and you might come out of this with your reputation and franchise intact.
APR 30, 2010
There's a big piece of paper on the wall in front of my desk that says: “There's ALWAYS more to the story.” It reminds me that whenever I think that I truly understand someone's motivations, or hear a tale about something happening in my little world, or the world at large, that there is always something left unsaid, something that I DON'T know, and more importantly more that NOBODY knows. As every scandal unfolds and stories hit the newspapers, the more I believe in this axiom. Think of the Toyota scandal. Perhaps they were envious of the way that the biggest Wall Street brands were able to damage a great brand name in a matter of months. Not to be left behind, their “shock” and “denial” that problems existed at all with their cars disappeared in the face of overwhelming proof. Not only were the car problems real, but they were aware of the issues for months if not years before (Note: corporate executives need to remember that “e-mail” is also “evidence-mail”). Certainly the folks at Goldman Sachs wish that some of their employees were more circumspect. E-mails have been made public where they used various expletives to describe a product that they created and sold to clients that is under investigation (Abacus 2007-AC1). When confronted with these e-mails yesterday in front of the Senate, Goldman CFO David Veniar replied: “I think that's very unfortunate to have on e-mail.” You think? A few months ago, if you had asked 100 people on the street who cared about cars which automobile manufacturer had the best reputation for quality, I would guess that as many as half would have said Toyota. If you asked 100 people who work on Wall Street which Wall Street firm had the best reputation for smarts and integrity, I would guess that as many as half would have said Goldman Sachs. The corollary to the “Sarch Axiom” is that the cover up of a scandal always ends up worse than the crime itself. Martha Stewart did not go to jail for stock manipulation, but for lying to investigators. Bill Clinton did not get impeached for fooling around with an intern, but for lying about it. Toyota, to their credit, in the face of the overwhelming evidence and knowing that their franchise was at risk, issued massive recalls to fix their cars and repair their brand. If Goldman wants to put this behind them quickly, they better read all of their own “evidence mails”. It truly would be “unfortunate” as Mr. Veniar states, to have more embarrassment continue to drip out slowly. Let the whole story out, come clean with what happened, and you might come out of this with your reputation and franchise intact. Show that you lied or obfuscated during the investigation, and nobody will even care that you might not be guilty of what you were accused of; they will only remember that you tried to cover up the truth.

Latest News

Farther debuts AI investment proposal tool for advisors to win clients
Farther debuts AI investment proposal tool for advisors to win clients

"Im glad to see that from a regulatory perspective, we're going to get the ability to show we're responsible [...] we'll have a little bit more freedom to innovate," Farther co-founder Brad Genser told InvestmentNews.

Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler
Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler

Former advisor Isaiah Williams allegedly used the stolen funds from ex-Dolphins defensive safety Reshad Jones for numerous personal expenses, according to police and court records.

Are you optimally efficient?
Are you optimally efficient?

Taking a systematic approach to three key practice areas can help advisors gain confidence, get back time, and increase their opportunities.

Advisor moves: Father-son duo leaves Raymond James for LPL, RayJay adds Merrill Lynch alum in Florida
Advisor moves: Father-son duo leaves Raymond James for LPL, RayJay adds Merrill Lynch alum in Florida

Meanwhile, Osaic lures a high-net-worth advisor from Commonwealth in the Pacific Northwest.

Beacon Pointe adds six RIAs in two-month acquisition spree, boosting AUM by $2.7B
Beacon Pointe adds six RIAs in two-month acquisition spree, boosting AUM by $2.7B

The deals, which include its first stake in Ohio, push the national women-led firm up to $47 billion in assets.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.