Goldman Sachs disclosure to CalPERS erroneous?
Goldman Sachs (NYSE: GS), in an attempt to win consulting business from CalPERS, erroneously assured the giant pension in March that it was not "the target of a formal investigation," according to a document obtained by Reuters. That was six months after the SEC (SEC news) sent Goldman Sachs a Wells Notice informing the firm that it might hit it with enforcement action.
Now, this may not be illegal. But the pension fund's investment staff will soon be asking Goldman Sachs for an explanation, Reuters notes. The nondisclosure to CalPERS certainly raises a few issues. Should Goldman Sachs have disclosed the fact that it had received a Wells notice? That's been a big debate.
The news also raises the issue of Goldman Sachs' ethics. On the surface it appears as if it made an erroneous statement to CalPERS in an effort to win business. This only fuels the idea that Goldman Sachs, even if it not breaking any laws, is hardly a good and honest business partner. But you could perhaps conclude the same for other Wall Street firms.
- here's the article