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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Wednesday, April 27, 2011

Goldman Sachs's Reputation No Longer Matters

It does not matter whether Goldman Sachs has a good reputation or a bad reputation, even when GS pays lip service to improving its management techniques. Steven M. Davidoff- DealBook, has interesting things to say about reputations and big companies. When a man's reputation receives a pounding because of ill-conceived actions, he is merely put in charge of another large company!

Technology has helped create ever larger institutions which have become inhumane, without compassion or pity, not concerned with the people who suffered greatly because of the actions of banks like Goldman Sachs that lead to the financial meltdown

As Wall St. Firms Grow, Their Reputations Are Dying
By Steven M. Davidoff - DealBook

Reputation is dead on Wall Street.

This is not to say that financiers and financial institutions still do not commit foolish misdeeds. Rather, so long as the authorities do not find law-breaking, the penalties are few.

The list of examples is long.

Former directors of Lehman Brothers and Bear Stearns still serve on the boards of public companies, and one, Jerry A. Grundhofer, a former director of Lehman, is on the Citigroup board. Traders responsible for disastrous mortgage bets have easily found lucrative jobs in finance.

Or take Daniel H. Mudd, who not long after being ousted as chief executive of Fannie Mae was named chief executive of the Fortress Investment Group. At Fortress, Mr. Mudd has been paid a salary and stock options worth more than $30 million in the last two years. This was despite the failure of Fannie Mae while he was at the helm, an event that wiped out almost all shareholder value and has cost the federal government more than $90 billion.

And Wall Street itself seems to be bearing little pain. Sure, the banks have been flogged in Congress and are subject to the Dodd-Frank Act, but it does not seem that their financial clients are avoiding doing business with them. This includes Goldman Sachs, which has been pilloried for ostensibly taking short positions against its own clients.

It was not always the case.

During the Great Depression, Goldman Sachs was caught up in a scandal involving the Goldman Sachs Trading Corporation. The taint of the scandal drove away business for more than a decade and made the firm extremely focused on reputation.

Today, both people and institutions seem to bear no penalty for their actions. They are rewarded.

Read the full article here


Anonymous said...

We’ve been Robbed!

We’re not broke, but the wealth grab is wrecking our economy. The rich can’t spend enough to keep the economy going. The engine that drives it is a strong middle class. The problem isn’t that we haven’t generated wealth, it’s that we’ve stopped sharing the wealth we’ve generated. If wages had kept up with productivity over the past 30 years, the median wage would be 60% higher than it is now. If income had increased at the same rate for everyone from 1979 to 2006, the average family would make about $10,000 more a year, but the top 1% would make $700,000 less.

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