Goldman Sachs Revives an Old Tactic: Keeping Quiet

Goldman Sachs has decided to keep a low profile in response to harsh criticism and a subpoena fired at the company by the Financial Crisis Inquiry Commission yesterday.

On a conference call with reporters following the announcement of the subpoena, the chairman of the commission, Phil Angelides, angrily accused Goldman of “deliberately and disruptively” trying to thwart the commission’s investigation by dumping billions of pages of documents in response to requests for information.

Goldman offered up only the blandest and most tepid denial. "We have been and continue to be committed to providing the FCIC with the information they have requested," Goldman said in a statement.

Goldman is deliberately under-reacting to the public pillorying served up by Angelides, a person familiar with the thinking at Goldman says.

Goldman Sachs
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Goldman Sachs

This response stands in marked contrast to Goldman’s sharp and lengthy response to the fraud lawsuit filed by the SEC in April. The same afternoon that the SEC lawsuit became public, Goldman vowed to “vigorously” contest the SEC’s claims and described the lawsuit as “completely unfounded in law and fact.”

Back in April, this kind of combativeness was new for Goldman. It was followed shortly by chief executive Lloyd Blankfein saying that the firm’s longstanding strategy of not engaging with the public or responding to criticism was “probably a mistake.”

Has Goldman had second—or third—thoughts about its PR strategy?

Goldman’s response to the SEC’s suit was so blunt that it is believed to have angered regulators, pushing the two sides further apart and perhaps delaying a settlement. It was a gamble for Goldman and one that may have backfired. Certainly, the public perception of the firm does not seem to have been improved by Goldman’s combativeness.

Now Goldman seems to have retreated once more to non-engagement.

Certainly, they have offered nothing to match the cleverly planned and cutting sound bites offered up by Angelides and FCIC vice-chair Bill Thomas.

Inside of Goldman there is certainly anger at the way the FCIC is characterizing the company. But they are doing their best not to let anyone know about that anger.