Goldman Sachs Analysts Cheats the System but Pays the Ultimate Price

Sarang Ahuja’s latest post:goldman sachs

Goldman Sachs Group is a leading American multinational investment-banking firm that engages in global investment banking, securities, investment management, and other financial services. The financial firm’s substantial and diverse clientele includes corporations, financial institutions, governments, and high net-worth individuals.

The big story today in Business Insider is Goldman Sachs’s decision to fire twenty New York- and London-based analysts in the Securities Division for cheating on their summer training examination. While some have thought that the firing was based solely on the lapse of integrity and academic dishonesty, others have speculated that the act could be based upon the disappointing third-quarter earing results reported last week.

Upon joining Goldman Sachs, analysts are put through the firm’s rigorous multi-week training and orientation program. Landing a position at Goldman Sachs University (GSU) for an analyst job is said to be more difficult than being accepted to an Ivy League college with its 4% acceptance rate. As with many Wall Street banks, Goldman invests an incredible amount of resources and funds to prepare its new recruits for their future positions. During the GSU program, hundreds of analysts attend classes in which different modules are taught regarding finance, accounting, business strategy, and consulting. In addition, the course is enhanced with various senior executives speaking to the students to better prepare them for their future positions

At the end of the rigorous training program, trainees are tested on what they know and have learned in their classes. The examination, held in July through early August, is a multiple-choice assessment that tests their knowledge of general finance, concepts of stocks, bonds, derivatives, and mortgages. Goldman Sachs warns analysts repeatedly that cheating on the test would not be tolerated, as any professional institution would.

The analysts were apparently given several materials a couple of days to prepare and study beforehand. The passing score on the exam is a 70% or higher. If a trainee were to fail to meet the passing requirements, they would not lose their position as an analyst. Rather, the candidates would be given an additional opportunity to retake the exam.

For many of the analyst at Goldman Sachs, the exam is not to be seen as especially difficult. What shocked the global banking giant was how the candidates cheated. The cheaters, who were spread across different rooms, used their Goldman-issued computers to search terms that came up on the exam through Google to look for answers. Goldman was able to trace the activities and hold those responsible with a consequence that best fits the crime.

On Wall Street, many people had mixed reviews on the matter. Some said that cheating on these test had long been accepted as part of the finance training. Others even made the extreme claim that the examinations were “a big waste of time” and that these accusations were an excuse to get rid of them due to the poor performance they received on the third financial quarter. However, other analysts and professionals, fully understanding the difficulty of attaining an analyst position, claim that any type of cheating is a compromise of the culture and structure of integrity at Goldman. In addition, many people claimed that, similar to cheating in college, cheating in the work environment should also have severe consequences.

In reality, we were taught at a young age that cheating should not be tolerated. Whether it was a spelling bee for your fourth grade class or a financial analyst job responsible of millions of dollars, this concept should applied.


from Sarang Ahuja


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