“Negative publicity” could hurt business, Goldman Sachs admits

4 March 2010

The reputation of Goldman Sachs could be damaged by the “negative publicity” it has recently attracted, the bank admitted.

Goldman Sachs has faced criticism for overcompensating bankers through its payments and bonus system and due to its involvement in providing credit default swaps to Greece’s government.

In a recent filing to the Securities and Exchange Commission (SEC), the bank listed the potential impact of “negative publicity” alongside market volatility and regulatory uncertainty as a potential threat to the bank’s success.

“The financial crisis and the current political and public sentiment regarding financial institutions has resulted in a significant amount of adverse press coverage, as well as adverse statements or charges by regulators or elected officials,” the document explained.

It added: “Press coverage and other public statements that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, often results in some type of investigation by regulators.”

Allegations can negatively impact morale among staff while responding to criticism is also a “time consuming and expensive” process, the bank continued.

Goldman Sachs recently donated $500 million to charity as part of a strategy to improve its public perception.

By Jim Ottewill

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