Inside a lucrative and envied Goldman Sachs Group Inc. trading squad, a pair of employees racked up praise in their recent reviews. One was dubbed “exceptional” with an “impeccable work ethic,” the other as “outperforming” and a “culture carrier.”
When the duo accepted new jobs at a hedge fund this year, they said, the bank urged them to reconsider. One recalled that after he refused, his manager’s tone shifted to a warning: “I would be concerned about your behavior in the past” at Goldman.
Soon after, Goldman fired the pair — Jon “JP” Paul and Sina Lashgari — from jobs on its program-trading desk, telling regulators they accessed sensitive computer code without authorization or a valid business purpose. Goldman suspected, but couldn’t prove, they intended to swipe some of the secret sauce behind several hundred million dollars in revenue, according to documents seen by Bloomberg. A notice it posted in their public employment records is now a red flag to any future employer.
Side by side at their lawyer’s office, Paul and Lashgari took the unusual step of opening up about Goldman’s allegation and their bitter breakup with one of Wall Street’s most elite banks. The way they see it: They did nothing wrong, and the ouster was retaliation, designed to send a message to their former team.
“We didn’t take a single line of code,” said Paul, a trader on the desk.
“I have worked hard to establish my career and reputation. Goldman will not take that away from me,” said Lashgari, who was a coder. “I was shocked by Goldman’s reaction to our resignations. I worked with these people for 10-12 hours a day for six years, and they know what type of person I am.”
The messy exit of two employees who pulled in seven-figure paydays from a vaunted Goldman team is a jarring turn in Wall Street’s yearlong war for talent. The pressure on investment banks to guard their franchises is particularly acute right now. Trading is pulling a lot of weight in earnings, there are few strategies left that offer an opportunity for outsize hauls, and just about every bank is fighting a tidal current of turnover.
While acrimony and breakups between banks and their talent are inevitable, they tend to stay quiet. This one offers a rare look at a trading desk that generates more revenue per employee than almost any other at Goldman. The unit, with about 20 people, crafts algorithms to help wager Goldman’s cash, raking in profits by anticipating and reacting to changes in the world’s biggest stock indexes.
It’s a business line that has a history of high anxiety over decampments, at a bank that spends deeply to get a technological edge and guards it fiercely.
“Our investigation showed that these employees engaged in serious misconduct,” said Andrea Williams, a spokesperson for the bank, who rejected any notion of retaliation. “They were terminated for accessing confidential and proprietary firm information without authorization and for refusing to cooperate fully with the firm’s investigation.”