There is no fiduciary responsibility that we are not

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there is no fiduciary responsibility; that we are not obliged to do what is in the client’s best interest; that we were not advising the client; that we are just there to facilitate trades between big boys (i.e., large institutional investors). The two things I thought were: No one ever told me this . I was advising my clients every day, telling them what I thought was right for them. Why did we have salespeople with clients if we were just trading monkeys matching up buyers and sellers? And second, that the argument about “we’re all big boys here,” that the markets are a level playing field, rang hollow. Surely it’s obvious that Goldman knows the most in any situation because it can see what both buyers and sellers are doing. I looked over at Taku, who was still asleep. I nudged him gently and said, “Hey, I’m going to get out of here. Thanks for having me.” I took a cab back to my hotel and stayed up till the early hours of the morning watching the rest of the hearings. Even though I was exhausted, I kept watching until the sun rose. ——— The meeting the next day was to be a formal sit-down with Taku’s boss’s boss’s boss, the head of the fund. I’d met the man several times over the years. He was middle-aged, dignified, formal—reserved in the way his culture called for. It was an important meeting, so I spent the morning at Goldman Sachs’s local office going over talking points with the local partner, a native of the region. He’d been with Goldman a long time, but what was puzzling to me, and to quite a few of my colleagues, was that this guy wasn’t especially conversant with the fund or its personnel. A lot of people wondered, How can this guy be a partner? But it turned out he was a trading partner, and traders, as I’ve said, tend to be somewhat introverted, managing risk but not dealing as much with the clients as the salespeople do. He just happened to be
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the most senior guy in the office, and (a bit embarrassingly for him) I, a South African Jewish guy living in New York, was going to be introducing him for the first time to the head of the fund that was Goldman’s client, even though the two worked ten blocks apart. We went into the meeting. In our preparation, the local partner and I had gone over several possible scenarios for ways we thought the talks might go—clearly the SEC investigation was going to come up—but we didn’t know exactly how things would go down. After handshakes and niceties all around, the head of the fund immediately brought up the SEC charges against Goldman Sachs. No bullshit on his part. The normally extremely dignified and guarded head of the multibillion dollar fund did not mince words. He looked at the partner and then at me and said, “Let me be clear with you guys. You don’t need to worry. We’re not going to stop doing business with you. The truth is, we haven’t trusted you guys for a long time, because we think Goldman Sachs is a hedge fund; we know you have exclusively your own interests at heart. Yet we also recognize that you’re the smartest guys on the Street, and there are times when we need to trade with you.”
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