Organization Culture at Goldman Sachs

Detractors of GS argued that the collective focus at GS quashed innovation. The interviewing process at GS was criticized for recruiting clones and not bringing in candidates who had the knack of understanding and diversifying into emerging areas in financial services. Friedman questioned, "Why should Goldman Sachs have been so much later than other firms in getting into derivatives? Why should we have been so much later than Salomon in getting into the mortgage business or in developing a capital markets group?" The collective focus at GS had a negative side due to the existence of groupthink in the organization...

In the same year, the company agreed to pay US$ 4.3 million in restitution and US$ 5 million in penalty related to improper trading in US Treasury securities and futures. In 2004, GS agreed to pay US$ 2 million to the Securities and Exchange Commission (SEC) for settling charges of promoting an IPO before the IPO registration became effective. The SEC also alleged that GS spoke to the media about an IPO by PetroChina before an initial registration was filed. Spear Leeds, a firm GS bought in 2000 and renamed as Goldman Sachs Execution & Clearing LP, had to pay US$ 45.3 million to the National Association of Securities Dealers (NASD) in 2004 to settle charges that it traded ahead of customers.