Goldman Sachs is making news for all the wrong reasons this week. First a report that it may be “throwing in the towel” on its bullish fixed income stance, then its shares were downgraded by a market-moving analyst, and now two former female employees have accused the firm of widespread gender discrimination.
The suit, filed by a former vice president and former associate, has actually existed for some time, but the two are now seeking class action status for their case, meaning they can represent nearly all females who have worked at the firm.
Claims issued in the expanded suit include the fostering of a “boy’s club” atmosphere, “where binge drinking is common and women are either sexualized or ignored,” as well as assertions that men at the firm make more money and earn more promotions than equivalent female staffers.
In the suit, H. Cristina Chen-Oster and Shana Orlich claim that female vice presidents make 21% less than their male equivalents and get promoted to managing director 23% less often. It’s unclear where they derived those numbers. Women made up roughly 20% of Goldman’ latest class of MDs, down from 23% the previous year.
If the judge signs off on a class-action lawsuit, Goldman’s potential liabilities would increase substantially. The bank has denied the claims and said the case lacks merit.
The news comes four months after Goldman was forced to apologize after handing out cosmetic mirrors and nail files at an event they sponsored that was aimed at getting women more interested in computer science.
The case facing Goldman isn’t near as blush-inducing as the one involving social dating app Tinder. The misogynistic claims in the recent sexual harassment suit involving its former VP of marketing and its founder are borderline unprintable.
Is Goldman Going Out of Fashion? (eFinancialCareers)
Goldman has lost one of its most sonorous cheerleaders. Brad Hintz, a senior analyst at Bernstein Research who has advocated Goldman’s stock for the past decade, has decided the firm won’t be outperforming the market after all. Goldman Sachs is, “currently hobbled,” says Hintz. Here’s why.
Dimon Has Throat Cancer (USA Today)
J.P. Morgan Chief Executive Jamie Dimon has been diagnosed with throat cancer. He said it’s curable and that he will continue to run the firm “as normal” during the eight weeks of treatment.
Yes, Please (Bloomberg)
BNP Paribas has applied for an exemption that would allow it to continue managing U.S. pension plans after pleading guilty to breaking U.S. sanctions. There are plenty of money managers preying that exemption is granted. Meanwhile, BNP has reiterated its plans to grow and add staff in the U.S. despite the setback.
The Perils of a Merged Investment Banking Team (eFinancialCareers)
Like others before it, Goldman Sachs has merged two of its investment banking groups in the U.S. For bankers now toiling in the mega-group, that means one thing: more work and less play.
Pay Cuts at Morgan Stanley (NY Post)
Morgan Stanley is looking to cut the percentage of pay allocated to its wealth managers from 60% of total revenues to around 55%. It’s cutting back on signing bonuses for new recruits, too.
Investment Banking Fees Saving Wall Street (Reuters)
Investment banking fees during the first half of 2014 were the highest since 2007. The top three performers remained the same: J.P. Morgan, Bank of America and Goldman Sachs.
Barclays Eyes African Growth (Bloomberg)
Barclays is doing some hiring along with its firing. The bank is adding staffers in Africa as its investment banking business picks up in the continent.
Buzz Around the Office
There’s No Such Thing as a Free Lunch (Bloomberg)
A German court ruled that a man must pay back an airport lounge after enjoying free lunches at their behalf. The scheme was simple: he bought a business class seat, would fill up at the luxury lounge, then bump back his ticket (at no charge) until the next time he was hungry and near the airport. He did it 35 times in one year.
Quote of the Day: “Clearly this is a seminal moment for JPMorgan. The problem is a number of the candidates to replace Jamie have left the bank in the last 18 months, so filling his shoes, which is a very big job, will not be straightforward.” –Christopher Wheeler, an analyst at Mediobanca, on potential succession plans at J.P. Morgan