In a conference call with the wealthiest customers of its private-wealth-management business, Goldman Sachs’ (NYSE:GS) CEO Lloyd Blankfein said there’s a positive outlook to the fraud charges against the company in that it has pushed the company to re-examine its business practices to “determine what we may be doing wrong.”
Blankfein and other Goldman executives have been communicating a lot more with their wealthy clients, as the constant media coverage has created what Blankfein identified as a “certain amount of fatigue,” which ultimately could cause them to lose business if it goes on too long and too deeply.
Much of this is damage control from unproven but serious charges which harm the reputation of the company just by the fact of being charged with them and having the media report on them as if they’re guilty.
The question continue to come up on the structured product issue on whether or not products developed by the company were purposely set up to fail.
Much of that comes from the financial media not really understanding how some of these products work and the responsibilities of each company in the transaction. Warren Buffett has addressed that very thing, saying that Goldman had no responsibility or need to know what their clients were thinking or going to do with those particular products.
In other words, the fraud case doesn’t seem to have a leg to stand on, but by having it continually reported on in the media it can force Goldman to settle in order to put it behind them and end the scrutiny.
