"Why I quit Goldman Sachs"

[DGuller]

I figured he was opening his own investment shop and that this is a ton of free advertising.

That was my thought too.  What sales pitch could be better than "I left Goldman Sachs because I hate stealing your money.  Please gimme your money.  "

[chipwich]

Poland. Poland never changes.

[alfred russel]

I figured he was opening his own investment shop and that this is a ton of free advertising.

Assuming he wants to serve the same type of clients he has experience serving, the advertising he is getting is probably not the good variety.

I figure his career stalled and he wanted to do something new, or he thought he was going to get canned. This was his version of a workplace shooting.

[Barrister]

I figured he was opening his own investment shop and that this is a ton of free advertising.

Assuming he wants to serve the same type of clients he has experience serving, the advertising he is getting is probably not the good variety.

I figure his career stalled and he wanted to do something new, or he thought he was going to get canned. This was his version of a workplace shooting.

I dunno - going out in a blaze of "they don't care about your clients, they only care about themselves!" sounds like pretty good advertising to me.

You can step down a couple levels from GS-type clients and still be dealing with some exceedingly wealthy companies and invididuals.

[crazy canuck]

Are there non-Jews in Goldman Sachs? Honest question.

Thanks for the confirmation.

[Malthus]

There was a recent Delaware case that makes this guy's complaining timely, though. Goldman got chided in the very current decision of Chancellor Strine in Re El Paso Corp. Shareholder Litigation, released on February 29, 2012. 

In that case, Chancellor Strine "reluctantly" denied the plaintiff's motion for a preliminary injunction to block a takeover offer by a rival corporation in a case where Goldman, who owned part of that rival, served as an advisor to the board of the target, and where potential conflicts of interest by the CEO were not disclosed. Chancellor Strine noted that the denial of the preliminary injunction is not the end of the matter; since if the majority of shareholders vote to approve the transaction in spite of the now-revealed conflicts, the disgruntled minority could still proceed with damages claims. 

Thus, Goldman is being dinged by the court for the same sort of behaviour as this guy is complaining about (self-dealing at the expense of clients).

[alfred russel]

Lawsuits over disclosure in M&A transactions in the US are about the biggest scam going. If the majority of shareholders approve the deal after the conflict has been publicized, I have a hard time caring.

That isn't to say that Goldman Sachs isn't pushing conflict of interest rules to (or past) the limit.

[crazy canuck]

Lawsuits over disclosure in M&A transactions in the US are about the biggest scam going.

Yeah, the few I have been involved in were basically expensive exercises in the CEO of the Plaintiff corporation trying to find a scapegoat for what was really just a bad business decision.  Thankfully I was on the winning disclosing side each time. 

[Malthus]

Lawsuits over disclosure in M&A transactions in the US are about the biggest scam going. If the majority of shareholders approve the deal after the conflict has been publicized, I have a hard time caring.

That isn't to say that Goldman Sachs isn't pushing conflict of interest rules to (or past) the limit.

The issue isn't whether the board would be liable under the wacky Delaware M&A laws, the issue is the fact that on a fair reading of the case Goldman's actions somewhat support the whinging in this guy's letter.

Even I know that it is hardly cool for the bank to advise the target on a takeover bid when it owns part of the company doing the acquiring, and where some on the board of the target know this and don't take adequate steps. That would be true even under the more easygoing Canuck version of the business judgment rule, or in those US states that have "other constituents" legislation. 

[Malthus]

Lawsuits over disclosure in M&A transactions in the US are about the biggest scam going.

Yeah, the few I have been involved in were basically expensive exercises in the CEO of the Plaintiff corporation trying to find a scapegoat for what was really just a bad business decision.  Thankfully I was on the winning disclosing side each time. 

The Canadian business judgment rule is far more forgiving than the law in Delaware re M & A transactions  though.

[The Minsky Moment]

Lawsuits over disclosure in M&A transactions in the US are about the biggest scam going. If the majority of shareholders approve the deal after the conflict has been publicized, I have a hard time caring.

It wasn't a disclosure issue with respect to Goldman (the Goldman conflict was in fact disclosed and known to the Board) - it was an issue about Board disloyalty.

[The Minsky Moment]

The Canadian business judgment rule is far more forgiving than the law in Delaware re M & A transactions  though.

That's hard to believe.  The Delaware BJ rule is very forgiving.  The problem is that it doesn't always apply (e.g. if there is a finding of lack of board independence or disloyalty). 

[Malthus]

The Canadian business judgment rule is far more forgiving than the law in Delaware re M & A transactions  though.

That's hard to believe.  The Delaware BJ rule is very forgiving.  The problem is that it doesn't always apply (e.g. if there is a finding of lack of board independence or disloyalty).

That's what I said.  The Canadian BJ rule applies in all cases and is far more forgiving than the Delaware law on M & A transactions - where the Board generally risks having to face the harsh gauntlet of the Unocal or Revlon tests. 

Though I'm certain you know that stuff better than I, who only read of it third-hand as it were.

[The Minsky Moment]

That's what I said.  The Canadian BJ rule applies in all cases and is far more forgiving than the Delaware law on M & A transactions - where the Board generally risks having to face the harsh gauntlet of the Unocal or Revlon tests. 

Got it.  That makes life for the BOD much easier.

[Malthus]

That's what I said.  The Canadian BJ rule applies in all cases and is far more forgiving than the Delaware law on M & A transactions - where the Board generally risks having to face the harsh gauntlet of the Unocal or Revlon tests. 

Got it.  That makes life for the BOD much easier.

Yup.

Even better from the Board's position, the Canadian courts have in effect adopted the position of the "other constituents" states (without Canadian provinces having to pass legislation) - that is, they no longer have to point only to increasing share value as justification for their decision, but also to such concerns as the local environment, workers, etc.

This makes it difficult for a court to challege board decisions except in clear cases.