Wall Street conventional wisdom holds that a sterling reputation is crucial to winning business and keeping clients. Goldman Sachs Group Inc. may be the exception, according to a new Bloomberg survey.
A May 9-10 global poll of traders, investors and analysts found that 54% had an unfavorable opinion of the New York company. A month after a Senate report said Goldman misled clients, 78% of those surveyed said the accusations will either have no effect on the firm or will harm its reputation without driving away clients.
"Investors will continue to put their money with capable institutions, regardless of their history or morality," said an email from Christian Contino, a survey participant, who is a consultant for the investment management section of the United Nations' International Fund for Agricultural Development. Goldman has "very capable spin doctors who will be able to downplay any negativity."
Stephen Cohen, a Goldman spokesman, declined to comment.
Goldman, led by Lloyd Blankfein, survived the financial crisis and has since been a target of criticism. Goldman agreed to pay $550 million last year to settle a suit from the Securities and Exchange Commission alleging the company misled buyers of a mortgage-linked investment the firm created in 2007.
The Senate's Permanent Subcommittee on Investigations, led by Carl Levin, D-Mich., used Goldman as a case study in its two-year examination of the financial crisis. When the subcommittee released its report last month, Levin said that Goldman misled clients and Congress about bets on the housing market.
Lucas van Praag, a Goldman spokesman, said at the time, "The testimony we gave was truthful and accurate, and this is confirmed by the subcommittee's own report."
"It seems unlikely that Goldman Sachs has to expect further consequences," said an email from Daniel Horak, a trader at Erste Sparinvest KAG in Vienna, who said in the poll that he had a "mostly unfavorable" view of the firm and that he didn't expect Goldman to lose customers.
Levin and Oklahoma Senator Thomas Coburn, the subcommittee's ranking Republican, formally referred their report to the Justice Department and the SEC, which are reviewing the findings.
Goldman was viewed less favorably than other banks by the 1,263 poll respondents. The poll found 25% of respondents had an unfavorable view of JPMorgan Chase & Co., 49% for Citigroup Inc. and 48% for Bank of America Corp.
Blankfein has tried to burnish Goldman's image. After the SEC filed its lawsuit last year, he formed a committee to study business standards. A report in January made 39 recommendations, such as changing financial disclosures and giving simpler explanations to clients about conflicts of interest. Goldman also began an advertising campaign in September to emphasize its role in job creation and alternative energy.
"We have to regain the trust of the public; we have no choice," Blankfein said in an interview that aired on CNN on May 2, 2010. "We can't survive without people thinking well of us," he said.
"Our shareholders, our clients, have been very, very supportive," he added. "They know the essence of who we are, and frankly I think we still enjoy a reputation with those — a good reputation with those key constituent groups."
