Cheating at GS (Anyone you know?)

Goldman Sachs Group Inc. is firing about 20 junior employees for cheating on internal training tests, according to a person familiar with the matter. From Yahoo Finance:

This is how the Goldman Sachs analysts who got fired were cheating

Goldman Sachs on Thursday fired 20 New York- and London-based analysts in the Securities Division for cheating on a test they took over the summer during training.
The firings, which came the same day the bank reported disappointing third-quarter earnings results, had everyone talking at the end of last week.

They captured the imagination. The premier global investment bank had caught some of the brightest young minds on Wall Street cheating.​

They also come at a time when there is a focus on behavior in finance and the treatment of the most junior bankers on Wall Street. The Big Five banks have also reported a broadly underwhelming set of third-quarter earnings, with Goldman Sachs among the banks to miss analysts' expectations.

It turns out the way in which the Goldman Sachs analysts cheated is surprising in its lack of sophistication.

They were caught Googling the terms on an exam using Goldman-issued hardware, according to people familiar with the matter who spoke with Business Insider on condition of anonymity.

Links:

http://finance.yahoo.com/news/goldman-sachs-analysts-got-fired-16292227…

http://www.wsj.com/articles/goldman-firing-about-20-junior-staffers-for…

 

"Goldman’s online modules test everything from industry and regulatory know-how to the firm’s anti-money-laundering and gift-giving policies, and often take an hour or so to complete, one person familiar with the matter said.

Several current and former Goldman employees described the tests as annoying yet unavoidable chores left to the last minute. Nevertheless, analysts who failed to meet the deadlines or score well enough could risk drawing the ire of their supervisors, people familiar with the matter said. Sharing answers, those people said, became a routine way to save time during an often hectic workweek.

It is unclear how the dismissed analysts’ broke the rules. One person familiar with the matter said Goldman had been explicit in telling employees what wasn’t permissible."

 

This is such a load of BS. All firms have these tests & I'm pretty sure everyone has 'cheated' in some way or the other. They are so incredibly annoying to complete. These guys were just scapegoats to scare & set a precedent for the future.

 

Pretty hilarious all the way around. On one hand, it's so Aspie to cheat to get a better score on a HR exam. On the other, who fires someone over this shit? It's almost like the banks think this will lead to positive PR. "The people we hire are such degenerates that they cheat on HR training exams, but hey - we fired them en masse because of our culture of corporate responsibility."

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CRE:

Pretty hilarious all the way around. On one hand, it's so Aspie to cheat to get a better score on a HR exam. On the other, who fires someone over this shit? It's almost like the banks think this will lead to positive PR. "The people we hire are such degenerates that they cheat on HR training exams, but hey - we fired them en masse because of our culture of corporate responsibility."

I can't speak for Goldman's program specifically but a number of analyst training programs require a minimum score on the exams to stay employed. Also, if you're in a generalist program, your score will be considered during group placement.

In either case, there's certainly motive to cheat.

If it's an internal compliance test, you have to keep taking it until you get 80% or whatever the cut off is.

 

Heard the same thing about JPM too, this is ridiculous. Everyone cheats on these things, they are the biggest pain in the ass and waste of time. I seriously don't understand the logic behind firing them, if it's to make an example of these people then that makes no sense. I guarantee HR probably cheats on those fucking things too, you can't pass them without it.

"My name's Ralph Cox, and I'm from where ever's not gonna get me hit"
 

"Hire people who are smart, hardworking, and ethical. If you screw up the last one, the first two will kill you." -Warren Buffett.

Don't know if it's ridiculous or not, but if there's clear cheating on a test (ie closed book examination), I'd argue that there's a correlation between that and ethics.

I think everyone assumes it's one of these online compliance thingamajiggers, but Google usually can't help you on those, and you can usually click back to find the answer and retake the exam later- and the designers know this. I wonder if this was more along the lines of first-year analyst training. My exam at Lehman was in a quiet room with firm provided laptops ala a college exam. The instructors clearly communicated what was cheating and what wasn't.

These people will land other jobs, but this is a good lesson to learn at the beginning of your career rather than in the middle of it. CC Jonathan Burrows, the fare dodger who lost an eight figure career.

They cheated, they got caught. If you're not cynical, GS wants to teach these kids a life lesson at 22 instead of 50. If you're cynical, GS doesn't want to hire people who are dumb enough to break the rules and get caught so easily. Either way, they're bright and hardworking and will land on their feet. GS isn't releasing names- there's no spite or permanent damage in this. Just a preciously rare moment where the right thing gets done (either for the right or the wrong reasons).

And I don't envy the HR manager or COO who made this call. It might be good PR for the firm, but imagine all of the dangerously negative attention on you, your decision, and your training program. (Unless again you're really cynical about this and think GS overhired and wanted to save $1.7 M in first year salaries over a public cheating scandal)

It sucks but learn from your mistakes and move on. It's your first job, not your last. Don't cheat, but if you do and get caught, accept the consequences and move on.

 

The problem is that there's two very different stories here. WSJ says it was online compliance. Bloomberg/BI says it was 1st month analyst training. Some 40 year old journalist at WSJ probably called up a VP out of his Rolodex who didn't have first hand knowledge and talked about the semi-annual compliance education. My suspicion is that a 23 year old at Business Insider probably called up their only contact at GS- a former intern last summer- and got the real deal.

If someone got fired for hitting the back button on one of those KYC or Sexual Harassment training exams, I'd agree it would be a travesty. I honestly don't think that happened here.

Still surprised no GSers have come forward to give us the scoop. It's an anonymous forum- people even get banned for trying to out people, and giving some very general facts and circumstances doesn't hurt anyone (please DO NOT post names). You can also help satisfy the curiosity of some industry veterans. Then again I can understand how a GS employee might be a little paranoid right now.

 
IlliniProgrammer:
If someone got fired for hitting the back button on one of those KYC or Sexual Harassment training exams, I'd agree it would be a travesty. I honestly don't think that happened here.
Of course that didn't happen. Hitting the 'Back' button is encouraged to learn more.
IlliniProgrammer:
Still surprised no GSers have come forward to give us the scoop. It's an anonymous forum-
You're surprised? Nothing is anonymous and Goldman employees want to protect their political future. You can't out your friends/political contributors and expect a good result.

So naive you are IlliniProgrammer. I kind of wish I was like that, but, alas, I am hard and crusty. At least that's what my Asian masseuse said.

 
DickFuld:
You're surprised? Nothing is anonymous and Goldman employees want to protect their political future. You can't out your friends/political contributors and expect a good result.

So naive you are IlliniProgrammer. I kind of wish I was like that, but, alas, I am hard and crusty. At least that's what my Asian masseuse said.

Dick, just because I'm an unsophisticated Midwesterner doesn't mean I'm an idiot. I know everyones' made their friends and I'm not asking people to name names or post anything that might hurt someone. Just asking for some innocuous color now that the cat's out of the bag. Honestly, I'd be happy to just hear whether the WSJ got it right or Business Insider got it right. (My hunch is on business insider, but that's as preposterous as Michigan State beating UMich at football)

Also, I can assure you that unless you happen to be on the board at HP, nobody is paranoid or motivated enough to be watching analysts' home computers or personal iphones.

 

I'd agree with you if it were those tedious online compliance training programs about sexual harassment, KYC, and risk management that every bank has every three or six months. But read the Yahoo Finance/ Business Insider article- that's the story I'm buying (which gives a different impression than the WSJ)

My understanding is that this was a proctored exam similar to the one I took at the end of analyst training at Lehman. It would have been for training conducted by college finance professors from a school like NYU or CUNY, with those same professors proctoring the exam. Instructions would have included the fact that you weren't allowed to get help from other analysts or access books, materials, or other outside sources. They would have warned everyone that cheating would be taken seriously, and the vast majority of analysts would have taken this the same way they took their last exam from three months ago. Heck, the firm had us spend four weeks in training (before our series seven) learning this stuff-- why wouldn't they take it seriously?

My school expected its students to abide by the rules on an exam, and routinely expelled students for cheating. If we hold 18-year-olds to that standard, I'm not sure it's a great idea to lower the bar for 22-year-olds who will be running trades on $1M or $10M notional on a regular basis. If you caught someone cheating on a test, how would you feel about giving them access to your brokerage account? If you were able to spot cheaters because you saw them using google and could prove it using their browser history on the laptop they took the exam on, would you trust them to make money without the SEC catching them for insider trading, spoofing, market manipulation, LIBOR rigging, or other abuses and issue you a seven or eight figure fine?

This situation is pretty ridiculous. Whichever side of the debate you're on, you have to wonder how people this dishonest (or, if you think cheating is common and expected- incompetent and clueless) ever got hired to work at Goldman Sachs- and how twenty of them made it in the door.

 

These were not compliance tests, those are actually impossible to fail. These kids cheated on corporate training tests, which don't actually matter, by taking answers from a prior test and not realizing the test changed. Serves them right, can't imagine how stupid you must feel to lose a BB IB job right out of school.

 

Lol, how did many of them have the academic credentials to get into GS in the first place? By cheating their way through school.

I went to one of HYPW (transferred after year one) and many of those little dinks would look up shit the entire time on their phones (or text each other) and fuck up the curve for everyone. It was extremely irritating and incentivizes people to cheat in some form so they don't fall behind and get screwed.

 

If you read the snippets of the article you would realize what this really was. They don't give a shit about the cheating. It was just an excuse to trim the payrolls. You fire the 20 lowest performing analysts now and claim it was about cheating or you wait 3 months and do it then. They must not be very optimistic about their Q4 deal flow.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 
heister:

If you read the snippets of the article you would realize what this really was. They don't give a shit about the cheating. It was just an excuse to trim the payrolls. You fire the 20 lowest performing analysts now and claim it was about cheating or you wait 3 months and do it then. They must not be very optimistic about their Q4 deal flow.

Haven't had a chance to review, but with MS struggling, this does not bode well for the industry.

 
heister:

If you read the snippets of the article you would realize what this really was. They don't give a shit about the cheating. It was just an excuse to trim the payrolls. You fire the 20 lowest performing analysts now and claim it was about cheating or you wait 3 months and do it then. They must not be very optimistic about their Q4 deal flow.

Hester I don't think you've ever worked for a large bank with reams of compliance policies and tens of thousands of front office employees. I have and I can tell you this conspiracy theory- that there's some sort of selective enforcement going on- is a little preposterous. Besides the fact that they can't figure out who's top or bottom bucket in about two or three weeks of real work, the analysts all talk to each and share stuff that could get them fired if it ever got out with their name attached. (EG "I got drunk one night and took some girl at a bar back to my office and she barfed on our MD's desk")

If there was selective enforcement it WILL get out, eventually without names attached and managers will eventually be fired over that.

I'm not against cynicism- I'm just against irrational conspiracy theory cynicism. You give these HR people too much credit in their ability to scheme, execute, and figure out who to fire after two weeks of actual work across an organization with 25,000 employees.

Sorry, but if you get caught cheating on an exam, I think that's prima facie evidence that you're either too unethical or too incompetent to manage GS's books- maybe both. I don't think there are any kids who got caught who are still working there.

I am a little less incredulous about the more modest theories that they overhired and needed an excuse to get rid of 20 analysts or that this was more about firing the idiots who got caught than the cheaters.

 

Not disagreeing with you but could just be that some bloke at HR is at/under his targets for an ED/MD promo (or not), someone whispered to him that people are cheating in these exams and BOOM! easy money..

Colourful TV, colourless Life.
 

I guess I am in the minority. I've cheated on maybe one homework assignment in my entire life. If they tell you that you cannot use Google or share answers with others, then you don't do it. Seems like a very literal requirement to me. "Everyone else is doing it," and "all the prior analyst classes did it," looks like an excuse to me.

 

The companies don't really care if you actually cheat on these. I would dare to argue they hope you do, this gives them cause to fire you later with reason if they have a need to fire people that has a lower chance of blow back.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

This is just so dumb, all-around. First, who is dumb enough to cheat using company hardware?. Second, why were they fired for this?! My company has exams just like this, but we’re practically expected to look things up.

"There's nothing you can do if you're too scared to try." - Nickel Creek
 

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