Analysts who cheated on compliance tests were fired by the firm…no, this is not the Onion.
Just two or three years ago everybody looked the other way when junior bankers at Goldman Sachs (and other major IBs) may have cheated on internal training and compliance tests (and clients etc.), but apparently that has changed. According to knowledgeable sources, Goldman Sachs is dismissing 20 analysts from various global offices including London and New York after determining they broke rules regarding internal training tests.
Cheating is cheating, but given the collusion-based cheating undertaken by these junior bankers was exactly the same as what many of their bosses had done just a few years earlier when it was common practice, there’s more than a whiff of hypocrisy in the new policy from Goldman.
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According to the internal sources, the analysts, who had been employed in the securities division, are already dismissed or are finalizing their departure from the bank.
Details on cheating by Goldman Sachs analysts
“This conduct was not just a clear violation of the rules, but completely inconsistent with the values we foster at the firm,” noted Sebastian Howell, a Goldman Sachs spokesperson in London, who had no further comment.
According to several financial industry sources, bankers throughout Wall Street help each other with basic training and compliance tests because the tests are seen as time consuming and repetitive. This tradition has been in place for decades.
That said, apparently regulators have started to lean on investment banks to take measures to prevent this type of endemic cheating.
Keep in mind that Goldman Sachs is one of the most selective employers in the industry. The mega bank hired just 3% of the 267,000 applicants it received in 2014, and CEO Lloyd C. Blankfein has modestly called the company “the employer of choice in our industry.” Of note, Fortune magazine has listed Goldman Sachs as one of the 100 best companies to work for every year since the magazine started making that list in 1984.
Perhaps not coincidentally, the news about the termination of the 20 analysts happens to come the same week that GS reported quarterly earnings below consensus analyst estimates for the first time in more than four years.