Goldman Sachs: Shades of Grey

1854 Words8 Pages
Abstract The problem to be investigated is looking into shades of gray and how it is applicable to ethical behavior. For many years, corporations, both large and small, operate their day to day business practices within the guidelines as established by the laws written by society but yet, still manage to display very questionable behavior. Companies such as Goldman and Sachs were found to be utilizing questionable trading practices so as to increase their financial profits while at the same time leaving many companies behind in ruin and eliminating thousands of jobs in the process. Ethics is more than doing what’s right or wrong, it is a way for balancing the system so that all businesses have the same opportunity. Actions constituting a Shade of Gray. Starting in the 1920’s. Goldman formulated a strategy for investing referred to as a ‘layering Strategy. This type of strategy was a way to utilize the money from one company to invest in that of another company. In practice, Goldman was providing false information to its clients because the company it created was not truly as profitable as the inflated share price would indicate. The executives at Goldman were fully aware of this but yet they continued to layer additional companies into the strategy because it would only appear successful as long as the market continued to grow. In the use and application of this practice, Goldman was lying through both commission and omission; and its lies not only affected its clients, but the market as a whole. By taking advantage of this particular strategy, Goldman Sachs was contributing to a factor that led to the stock market crash in 1929 (Jennings, 2012) During the 1990s, within the financial investing market, there had been a standard underwriting practice that required a private company to demonstrate a
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