What Is Up with Wall Street?

Foundations of Ethics: Values and virtue

What is Up with Wall Street? The Goldman Standard and Shades of Gray.

The Price of Ethical Behavior

The problem to be investigated is; 1) should corporations be expected to act ethically at all times and; 2) does applying ethics make it more difficult for business to be successful? The case study, “What is Up with Wall Street? The Goldman Standard and Shades of Gray” (Jennings, 2012, p.73) illustrates the ethical dilemma that corporations face and the profound impact of their decisions not only on other corporations but on society as a whole.

About Goldman Sachs

Goldman Sachs was founded by Marcus Goldman and his son-in-law Samuel Sachs in 1869 for the purpose of providing small business loans and creating a market for the loans through the sale of commercial paper (Jennings, 2012, p. 73). The company moved away from direct business loans because of the constraints in that market and launched the investment trust in the 1920’s. These trusts were open to all investors, big and small and held shares for the purchased of stocks for the portfolio. Investment trusts contributed to the 1929 stock market collapse. Layering investment strategies were made possible by the creation of investment trust. Layering made it possible for Goldman Sachs to use its customer’s money to make money without the customers realizing Goldman’s direct impact on the market prices.

When Goldman Sachs went public in 1999, the company’s appetite for making money went on steroids. Since the partners were not individually and personally responsible for company missteps, Goldman became extremely aggressive in its business dealings. There was a fundamental shift in the company DNA from one which felt responsible for customers to one which made making money the primary motive for all actions. Prior to going public, the company guarded its relationships and reputations with its customers and would give back money to clients to protect the...