Goldman Sachs Fires Employees Over Communications Policy Violations
Goldman Sachs Group has terminated multiple employees at its corporate cash management business due to what the bank called “serious violations” of its communications policies. The move comes as Wall Street faces increasing scrutiny over employee communications, with fines amounting to hundreds of millions of dollars being imposed on banks for past breaches.
The dismissals at Goldman Sachs highlight the risks associated with using unapproved messaging apps, such as WhatsApp, for conducting company business. These violations pose a threat to government-mandated record-keeping practices. In a memo seen by the Financial Times, the bank informed employees of the terminations, stating that it had lost confidence in the individuals following the policy breaches.
Four employees, including Hari Moorthy, a partner at Goldman and the global head of transaction banking, were fired, according to insider sources. The day-to-day management of the transaction banking unit will now be led by Philip Berlinski, Akila Raman, and Luc Teboul. Moorthy has yet to respond to requests for comment.
Goldman Sachs, in a statement, confirmed the terminations but refrained from commenting on individual disciplinary matters. However, the bank emphasized its commitment to its transaction banking business and the seriousness with which it takes its communications policy.
The news of the firings was initially reported by Reuters. Under Goldman’s communication policy, employees are required to use approved channels for firm-related business communications.
Transaction banking is a new venture for Goldman Sachs, launched in 2020, that primarily provides cash management services for corporate clients. However, the business has faced regulatory scrutiny, particularly in providing banking infrastructure for fintech companies without a US banking license.
Record-keeping practices on Wall Street have become a significant concern in recent years. Regulators have discovered banks’ failure to track thousands of unauthorized texts and emails sent through personal phones or unapproved apps. Last year, Goldman Sachs and other banks paid $200 million in fines to the US Securities and Exchange Commission and the Commodity Futures Trading Commission for record-keeping breaches.
To address these concerns, several banks, including Goldman Sachs, now require employees to install Movius on their phones. This app enables compliance staff to monitor calls, text messages, and WhatsApp conversations with clients, ensuring compliance with communication policies and regulations.