Goldman Sachs

Morning Docket: 03.02.11

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Running from the law (firm)?

* He might be a “litigious little man,” but I still dig Prince. Patterson Belknap just wants his billable time and his [insert guitar riff here] kiss. [New York Daily News]

* Star Magazine says that Katie Holmes is a drug addict. Which drug? Scientology. She might win the libel lawsuit, but her ultimate judge will be Xenu. [Reuters]

* A judge in Illinois won’t let a defendant who looks like the Crazy Cat Lady from the Simpsons get her hair done or wear makeup at trial. [Chicago Sun-Times]

* A judge in New York, on the other hand, will give a defendant the tie off his neck and the Brooks Brothers shirt off his back just so he can look stylish in court. [New York Post]

* Just because your kid went to the prom with a Muslim doesn’t mean that you’re down with Islam — especially not when you want to make it a felony to follow Shariah law. [Washington Post]

* Christina Aguilera got arrested for being drunk in public. Someone needs to put that genie back in her bottle before she heads the way of other infamous Mouseketeers. [ABC News]

* How desperate do you have to be to molest your kid in exchange for a date? How stupid do you have to be to think child porn therapy is real? The answer to both questions is VERY. [Detroit Free Press]

* The SEC has accused Goldman Sachs’s ex-director of insider trading. The next insider trading he’ll probably be doing is for cigarettes in the pokey. [Wall Street Journal]

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Goldman Sachs Accused of Sex Discrimination

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The fantastically successful firm of Goldman Sachs isn’t just “a great vampire squid wrapped around the face of humanity.” It also discriminates against women, according to the allegations in a lawsuit filed earlier today.

Three female ex-employees of Goldman Sachs accuse the venerable bank of maintaining an “outdated corporate culture” that discriminates against women in terms of pay and promotions. The Goldman Girls — not to be confused with Betty White et al. — seek class-action certification for a class consisting of all female managing directors, vice presidents and associates in the last six years.

The lawsuit alleges that women are underrepresented in GS management, making up just 14 percent of partners, 17 percent of managing directors, and 29 percent of vice presidents. Given what it means to be a partner at Goldman — the New York Times recently described it as “the equivalent of winning the lottery,” in an interesting article about some GS partners being stripped of partnership (law firms aren’t the only ones who can play that game) — the stakes are high.

That’s the straightforward stuff. Other claims in the lawsuit, as noted by Nathan Koppel of the Wall Street Journal, are “a bit more salacious”….

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Goldman General Counsel Greg Palm Is Still Richer Than You

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Last November, we scrutinized the compensation of one of America’s best-paid in-house lawyers: Gregory Palm, general counsel of Goldman Sachs. There was some nit-picking from readers about the precise size of his (pay) package, reflected in the various updates appended to the post, but there was unanimity on the main point: serving as Goldman’s top lawyer is a path to riches.

Over the weekend, the New York Times published a long, interesting, behind-the-scenes look at the negotiations between Goldman and the SEC that culminated in the bank’s $550 million settlement — negotiations in which Greg Palm played a leading role. For some good commentary on Louise Story’s article, check out Larry Ribstein (who sees the case as a strike suit that just happened to be brought by the SEC).

What we found most intriguing about the NYT piece — which weighed in at a hefty 3,200 words, as noted by the WSJ Law Blog — was the delicious dish about Gregory Palm’s pay….

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Non-Sequiturs: 07.16.10

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Carte Goodwin

* Studying for the bar? Here are the top 10 people you want to kill. [Legally Noted]

* Are the Mel Gibson tapes admissible in court? Here is one lawyer’s opinion. [Blogonaut]

* Goldman Sachs won’t take a tax deduction on its $550 million settlement with the SEC. [TaxProf Blog]

* Holy Hotties, Batman! West Virginia Governor Joe Manchin will appoint his hunky ex-GC, Carte Goodwin, 36, to the Senate seat formerly held by the late Senator Robert Byrd. [WSJ Law Blog]

* Rod Blagojevich’s crassness has been established beyond a reasonable doubt — but what about his alleged corruption? [Chicago News Cooperative]

* The courthouse is not a boxing ring. Except maybe in Scranton. [Allentown Morning Call]

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Miss the Goldman Sachs Hearing? We’ve Got You Covered.

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If you missed the Goldman Sachs Congressional hearing today, you missed the height of unintentional comedy. There are too many highlights to mention. Senator Carl Levin using a dirty word, the ongoing train wreck that is Senator Tom Coburn, it was the kind of hearing that makes you laugh out loud at Congress (and secretly weep for our country). I’ll let Bess Levin of our sister site, Dealbreaker, describe a particularly lively twenty minute exchange:

* 10:09: Carl [Levin]: “Goldman Sachs treats clients like objects (of profit).” Jackie Treehorn, a former prop trader, was the first to pioneer this model at the firm.

* 10:16: Goldman made money off its shorts. Dun Dun Dun.

* 10:26: Apparently Goldman didn’t just hurt its clients, it hurt everyone in the world. Take a moment right now to show us on the doll where Goldman touched you.

If you missed the hearings, you should check out Dealbreaker’s live blog. Just wait until Coburn starts talking.

Live-Blogging The Goldman Flogging: There’s Gonna Be A Showdown [Dealbreaker]

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Attack of the Lower Upper Class

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There are a lot of media outlets falling over themselves to capture a new angle to the Goldman Sachs lawsuit. But the Washington Post’s Matt Miller (gavel bang: ABA Journal) brilliantly used the Goldman lawsuit to address a potentially much bigger issue. S.E.C. v. Goldman could be the first shot of a new kind of class warfare:

A few years ago, a Goldman Sachs banker, still shy of his 40th birthday and worth, I was reliably told, some $80 million, told me that he wasn’t in his line of work for the money. “If I was doing this for the money,” he said, with no trace of irony, “I’d be at a hedge fund.”

What to say? Though such a statement is perhaps only fathomable on a small plot of real estate in Lower Manhattan at the dawn of the 21st century, it suggests how insular and debauched our ruling class has become.

For several years I’ve predicted that a new wild card in American life — the presence of economic resentment at the bottom of the top 1 percent of our income distribution — would become a powerful force for reform. The SEC’s fraud case against Goldman Sachs may be the first shot in what I think of as the revolt of the “lower upper class.”

Who belongs to the lower upper class? According to Miller, you do…

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Quote of the Day: Different L Word

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I am a lawyer, not a lobbyist. Goldman Sachs has hired me as a lawyer — to provide legal advice and to assist in its legal representation — and that is what I am doing.

– Greg Craig, former White House Counsel and now a partner at Skadden, explaining why he is not bound by the president’s ethics policy barring former White House officials from lobbying for two years after leaving office.

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SEC Accuses Goldman Sachs of Hypocrisy in Civil Suit

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The Securities and Exchange Commission filed a civil suit against Goldman Sachs this morning. According to the SEC, Goldman is guilty of taking a “do what I say, not what I do” approach to mortgaged-backed securities.

Well, d’uh. That’s why Goldman isn’t suckling on the federal teat right now.

The SEC claims Goldman sold a financial instrument that they knew was going to fail, while at the same time taking short positions against that instrument.

Goldman denies the charges:

The SEC’s charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation.

Am Law Daily reports that Sullivan & Cromwell partner Richard Klapper will be representing Goldman in this matter.

Let’s unpack the SEC’s complaint (pdf). Whether or not the SEC prevails in this civil litigation, their complaint certainly succeeds in making Goldman look very shady — the company’s stock tanked this morning.

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Goldman Envy Comes to the Legal Profession

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goldman sachs.gifOver the weekend, the New York Times had an interesting article about compensation for Wall Street bankers. The article explained how, due to criticism from the public and from Congress, banks shifted employee comp away from cash and towards stocks and options. This shift was supposed to align pay with performance, averting an AIG situation of rewarding failure.

Now, thanks to the recovery in bank shares — fueled in part by generous government bailouts, and not necessarily the brilliant performance of bank employees — these stock and option grants are turning out to be super-lucrative. Here’s an interesting excerpt:

Goldman Sachs, for instance, sharply cut nearly all bonuses it paid last year but gave some executives more options than usual.

The company gave its general counsel, for example, 104,868 stock options and 14,117 shares in December, when the bank’s stock was around $78.

Now the bank’s shares have more than doubled in value, making that stock and option award worth nearly $12 million, according to Equilar, an executive compensation research firm in Redwood Shores, Calif.

Sullivan & Cromwell partners, eat your hearts out. Not only does Goldman GC Gregory Palm get to boss you around, he also makes more money than you do.

Way more. Get a hint of how much, after the jump.

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