- Trending
- Comments
- Latest
Goldman Sachs fell more than 4% in pre-market trading Friday after General Counsel Kathy Ruemmler announced her resignation following the release of Justice Department documents showing she had exchanged emails with Jeffrey Epstein and accepted luxury gifts from him before joining the bank.
The resignation, confirmed late Thursday, comes as reputational concerns mount at the Wall Street firm and investors react to renewed controversy.
The decline in Goldman Sachs shares followed disclosures showing Ruemmler had prior communications with Epstein before joining the bank. Goldman Sachs Group Inc. closed at $944 on Thursday but was down 4.24% at the time of publication. Broader markets also fell, with the Dow Jones Industrial Average dropping 669.42 points, or 1.34%, to 49,451.98. The S&P 500 fell 1.57% to 6,832.76, while the Nasdaq Composite slid 2.03% to 22,597.15.
The selloff in Goldman Sachs shares came after Ruemmler confirmed she will leave the firm on June 30, citing mounting media attention.
“I made the determination that the media attention on me, relating to my prior work as a defence attorney, was becoming a distraction,” — Kathy Ruemmler, General Counsel, Goldman Sachs, in an interview with the Financial Times.
She also told Axios it was her “responsibility…to put Goldman Sachs’ interests first,” adding that she had informed Chief Executive David Solomon of her decision to resign.
Solomon accepted the resignation and publicly commended her tenure. “Throughout her tenure, Kathy has been an extraordinary general counsel, and we are grateful for her contributions and sound advice on a wide range of consequential legal matters for the firm,” — David Solomon, CEO, Goldman Sachs, in a statement.
Despite that endorsement, the drop in Goldman Sachs shares underscores investor sensitivity to governance and reputational risk at major financial institutions.
The pressure on Goldman Sachs shares intensified after the Justice Department released additional documents from its Epstein investigation earlier this week. The records revealed that Ruemmler had exchanged emails with Epstein before joining Goldman Sachs and had received luxury gifts from him.
According to reports, the documents included references to a Hermès handbag, Apple devices, spa treatments, haircuts, and plane tickets. In one January 2019 email cited by the Financial Times, Ruemmler wrote: “Am totally tricked out by Uncle Jeffrey today! Jeffrey boots, handbag, and watch!”
Other communications reportedly referenced professional contacts and personal matters, including inquiries about employment opportunities.
Ruemmler has stated that she regrets knowing Epstein and was unaware of his criminal conduct at the time. “I made decisions based on the information that was available to me. I have an enormous amount of sympathy and heartache for anyone who he hurt,” — Kathy Ruemmler.
The disclosures have placed renewed scrutiny on the bank’s internal risk oversight, particularly as Ruemmler had served on committees overseeing reputational risk and conduct.
The controversy has sparked frustration among some current and former executives, adding further volatility to Goldman Sachs shares. Several individuals familiar with board discussions indicated dissatisfaction with how Solomon initially handled the matter.
“It’s a distraction, and it’s embarrassing,” — a person close to a Goldman Sachs board member.
The individual added, “It’s not the board’s job to hire and fire people. That is the CEO’s role.”
Five former partners reportedly expressed surprise that Solomon publicly supported Ruemmler before her resignation, expecting the firm to distance itself more decisively. Prior to the document release, Ruemmler was regarded internally as disciplined and discreet.
The bank has not named an immediate successor or outlined interim leadership for its legal division, leaving open questions about continuity in one of the firm’s most critical governance roles. As a result, Goldman Sachs shares remain under close watch by investors assessing potential reputational fallout.
The renewed focus on Epstein-related disclosures has affected other institutions as well. Brad Karp, chair of Paul, Weiss, Rifkind, Wharton & Garrison, stepped down last week after his own ties to Epstein appeared in newly released documents.
Karp said the disclosures had shifted attention onto him and that “that is not in the best interests of the firm.”
While the broader market downturn contributed to Friday’s declines, the timing of the drop in Goldman Sachs shares suggests the resignation amplified investor concern. The episode highlights the enduring reputational risks financial institutions face when senior leadership becomes entangled in controversies, even if the conduct predates their tenure.
