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Comment by canvia | Hacker News Reader

I guess you haven't read or listened to the whole thing?

"Goldman had advised one energy company, El Paso Corp., as it sold itself to another energy company, Kinder Morgan, in which Goldman actually owned a $4 billion stake, and a Goldman banker had a big personal investment. The incident forced the Fed to ask Goldman to see its conflict of interest policy. It turned out that Goldman had no conflict of interest policy -- but when Segarra insisted on saying as much in her report, her bosses tried to get her to change her report. Under pressure, she finally agreed to change the language in her report, but she couldn't resist telling her boss that she wouldn't be changing her mind. Shortly after that encounter, she was fired.)"

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I did skim the examples. The one you quoted isn't damning either. Its not illegal for M&A professionals to have conflicts of interest. That's the rule in the business world. The exceptions (e.g. fiduciary duties of corporate officers) are provided by law.

Sure it's not illegal, but do you think it's ethical?

Do you think it's a thoughtful policy for Goldman Sachs?

I know if I were one of the M&A parties, I would irate to find out that the supposed advisor had a personal stake that could have influenced how things shook out.

Contemporary understanding is that outside of special cases, ethics is dictated by the market. If Goldman's clients have a problem with with bankers having personal stakes, they'll not use Goldman's services. Its not like they don't know. Its very common for investment professionals to get in on the deals they work on.

In any case, regulators are entrusted with making sure people follow the law, not some ethical code that differs from person to person.

> ethics is dictated by the market

Maybe we can start trading in ethics? /s

"ethics is dictated by the market"

How can you seriously say that? It's fine to hurt people as long as they're willing to tolerate it or remain ignorant to it? Preying on ignorance isn't ethical even if it markets well.

Why was the Fed looking at Goldman's conflict of interest policy at all then?

But the change in the report was minuscule, and I think her boss was actually correct.

Goldman had written materials about conflicts. Segarra claimed they weren't enough to a "policy" by her opinion. Her boss argued, it was a policy even if it was a really poor one. He didn't tell her to change the report to say they had a policy, he told her to change it to say Goldman's policy was very deficient and need to be improve a lot.

It's essentially a semantics argument, not some huge cover up.

And her boss's stance is arguably more detailed and accurate.

I think this is actually missing the point. Her boss may have been right, and I think he was. But as a regulator she's entitled to file her opinion and have him override it. Then it's all in writing.

The fact that they refused to do this and instead bullied her into their own opinion is remarkable. If they'll do this for something so minuscule, imagine what they'll do for bigger issues.

The tapes aren't exposing that Goldman got away without a conflict of interest policy, they're exposing that the Fed is still refusing to let staff stand by their independent opinions.

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