Life's Perilous When You're Not Goldman Sachs

When Jon Corzine left Goldman Sachs, he spoke openly about turning MF Global into a “mini-Goldman.” It’s, um, not working out too well. Ask insiders why Corzine got away with so heavily leveraging the company to make risky trades, and they all say the same thing, Andrew Ross Sorkin writes for the New York Times: “He was from Goldman Sachs.” Being an ex-Goldmanite “has long been considered the ultimate calling card on the street,” he explains. But many alums are discovering the perils of running “without the Goldman net.”

From Corzine to John Thain to Robert Rubin to J. Chris Flowers, some of Goldman’s highest-profile progeny, left to their own devices, have been blundering their way to financial ruin. Sorkin’s theory: they’re missing Goldman’s “special ingredient” of strong risk management. Goldman hedges aggressively and empowers risk managers to stand up to even top executives. Hot traders leave and take big risks elsewhere—only to learn that “outside the Goldman fishbowl, with its layers of risk management, Wall Street can be a lonely place.” Click here for Sorkin's full column.