Goldman Girds for War

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If the Securities and Exchange Commission hoped its lawsuit against Goldman Sachs would humble the firm, it may be sorely disappointed.

The charges against the firm haven’t left Goldman’s employees feeling humiliated, or seething at the derivatives specialists who brought the black mark of official fraud accusations, or plotting against the traders who have ruled the firm since the departure of Hank Paulson and the rise of Lloyd Blankfein.

“To tell you the truth, I’m not sure it doesn’t help,” says one Goldman banker about the fraud charges. “Sure does make us look smart, right?”

Instead, Goldman’s employees have unified, developing an “us against them” siege mentality. In conversations with over a half-dozen people familiar with a wide swath of Goldman, including several current and former employees, I never encountered anything but support for Goldman’s management and derision for the SEC’s lawsuit they view as fatally flawed.

“If they served Kool-Aid inside of Goldman, it’s safe to say everyone would be drinking it,” says one senior New York attorney whose practice brings him into contact with many Goldman employees.

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Goldman’s solidarity in the face of its legal and public-relations challenges is surprising. At other firms, challenging times have given rise to internal dissent. Merrill Lynch, for instance, saw its executives waging something close to open warfare through press leaks as losses at the firm mounted in 2007 and 2008.

“It’s like the firm is full of Stepford bankers,” says one Goldman vice president, adding that the solidarity was “almost spooky.”

http://news.yahoo.com/s/dailybeast/20100426/ts_dailybeast/7761_goldmangirdsforwar/print

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“It’s like the firm is full of Stepford bankers,” says one Goldman vice president, adding that the solidarity was “almost spooky.”

Whose bread I eat, his song I sing