Last week, the Securities and Exchange Commission filed a civil suit against Goldman Sachs, one of the leading investment firms on Wall Street, and one of its former employees, claiming the bank defrauded investors by creating a mortgage scheme designed to collapse and eventually fail. The SEC says Goldman enabled John Paulson, a hedge fund manager who made a large income based on purposely betting against certain markets and choosing several mortgages that would eventually default.
Goldman supposedly marketed those mortgages, converted them into a bond that it then sold it to investors, who were unaware of the arrangement between Goldman and Mr. Paulson. Whether or not Goldman disclosed the information to investors, which is ultimately the Golden Rule of Wall Street firms, a public relations campaign and 'image overhaul' is needed to reassure current shareholders, ensure the trust of forthcoming investors and fight for the reputation they previously built.
In a statement released earlier this week, Goldman Sachs said the charges are "completely unfounded in law and fact" and the company said it would "vigorously contest them and defend the firm and its reputation."
This guest blog was written by PRowl Public Relations staff member, Stephanie Loiero.