With around 140 years of trading under it’s belt, investment firm Goldman Sachs has courted it’s share of controversy over the years. In one particularly memorable stunt, filmmaker Michael Moore went as far as wrapping the firm’s New York headquarters in police tape and declaring it a ‘crime scene’, given it’s visible hand in the 2008 financial crisis.
With assets of around $932 billion – enough to buy a Nintendo Wii for everyone on earth – it seems Goldman Sachs can weather the storms of bad publicity. Still, the firm clearly shares the stark sentiments of Warren Buffett (aka World’s Richest Person 2008) when investments and reputation go sour:
“Rule number one: Never lose money. Rule number two: Never forget rule number one.”
According to one article, a recent investment in ‘Village Voice’ media proved particularly lucrative for Goldman Sachs. The jewel in the crown of the investment? A sixteen per cent stake in ‘Backpage.com’ – a controversial website providing “online prostitution advertising” in the USA.
Of course, contrary to Buffett’s golden rules, such gains did not exist in a vacuum. The human cost of the company’s vast return was increasingly questioned, with one US legislator remarking that:
“In every case of sex trafficking [the District Attorney’s office investigated] the girl was involved with Backpage.com at some point or another.” (source)
On learning of an imminent investigation into Backpage, bolstered by a convincing argument that it was ‘facilitating the trafficking of underage prostitutes and sex slaves’, Goldman Sachs moved ‘with record speed’ to sell their stake in the business.
Perhaps investors were horrified at the prospect of financing slavery. Then again, perhaps not. Perhaps they were horrified only at the thought of committing Buffett’s cardinal sin: losing money when the damning article hit the news stands.
Whatever your interpretation, the Backpage episode is a stark reminder of the power wielded by the likes of Goldman Sachs. One more demonstration that it is often at the polished tables of stockholders that the shackles of modern-day slavery are serviced. Or broken.
The question is, which Golden Rule will take precedence in the minds of investors?
Through our Finance Against Trafficking initiative, we want to equip businesses big and small to say a proactive ‘No’ to injustice in their spheres of influence, with tailored support to identify and prevent trafficking risks in their operations. If you want to get your business on board, check out www.financeagainsttrafficking.org or email us at firstname.lastname@example.org .