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Is Goldman making a statement by firing cheating junior executives?

By ValueWalk
Capital Markets

Perhaps most surprising about last week’s news that 20 Goldman Sachs analysts were dismissed from the elite banking organization for cheating was how easy it was for test administrators to catch the offenders — highlighting the fact that those cheating should have known their unsophisticated search tactics could be so easily tracked.

Presumably tech savvy millennial Goldman Sachs recruits used traceable company computers to cheat on tests

Goldman Sachs is more often than not the subtle bank that, on a relative basis, keeps its head above water out of the fray. It is perhaps for this reason that when Bloomberg News first reported that 20 entry level analysts were caught cheating on a basic exam, people took notice. Cheating on this exam was a practice Bloomberg reporter Sofia Horta E Costa had said in a broadcast interview occurred in the past across Wall Street without punishment, hence a degree of surprise. When Business Insider’s Julia La Roche reported Monday that the cheating was relatively easily to detect – Google searching for test answers on Goldman Sachs-controlled computers – it appeared that the assumed generally tech savvy millennial audience didn’t think much about the possibility of getting caught or being investigated. In fact, La Roche’s article contains statements that indicate dismay and incredulity that they would be held accountable for cheating on such an insignificant test. In other words, the “best and brightest” on Wall Street were surprised to have beeninvestigated and then dismissed for cheating in this particular instance. Had they assumed they would be monitored and investigated for cheating on the relatively inconsequential test one might expect their behavior to have changed.

But is the cheating scandal and more specifically Goldman’s punishment for unethical behavior a sign of the times?
History of Wall Street cheating from money laundering to inconsequential exams
From 2008 onward, it can be documented that in the real world, large bank executives benefited from having investigations blocked and generally avoided consequence from what were illegal actions. Both the CBS News program 60 Minutes and PBS Frontline documented investigations into fraud surrounding the 2008 mortgage crisis had been blocked, and charges ranging from market manipulation to money laundering for terrorist organizations and drug cartels resulted in fines being paid generally by shareholders rather than punishment assigned to individual corporate executives. Just like the test cheaters, it can be argued that among some in the banking elite the very thought of being investigated for criminal behavior was incredulous.
When the bank executives essentially operated without being held accountable for their actions, wha

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