Goldman Sachs shares fell 40 points in US Friday pre-market trading after its top legal officer said she would step down following public scrutiny over her ties to deceased sex offender Jeffrey Epstein.
Kathy Ruemmler, the bank’s general counsel, confirmed she will leave the Wall Street firm on June 30. Her decision follows the release of Justice Department documents revealing her communications with Epstein.
Goldman Sachs Group Inc. closed at $944 on Thursday, but is now down 4.24% at the time of this publication. The Dow Jones Industrial Average also dropped 669.42 points, or 1.34%, to 49,451.98. Stock market index S&P 500 fell 1.57% to 6,832.76, while the Nasdaq Composite slid 2.03% to 22,597.15.
Goldman Sachs counsel to step down after Epstein files reveal ties
Late Thursday, Ruemmler told the Financial Times that the attention on her had become untenable. “I made the determination that the media attention on me, relating to my prior work as a defence attorney, was becoming a distraction,” she said.
She also told Axios it was her “responsibility…to put Goldman Sachs’ interests first,” and informed Chief Executive David Solomon of her plans to quit. Solomon accepted the resignation and praised Ruemmler as “one of the most accomplished professionals in her field.”
“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,” Solomon said in a statement.
Earlier this business week, the Justice Department released more documents from its Epstein investigation. The documents showed Ruemmler was in contact with the sex offender before she joined Goldman Sachs.
In one of the emails covered by FT, Ruemmler asked Epstein if he was going to trade “one of his Russians” for her to get a job at Citadel. In another email chain, she forwarded messages to Epstein about an affair she had with one of his close associates.
The records also showed Epstein provided her with luxury gifts, including a Hermès handbag, Apple devices, spa treatments, haircuts, and plane tickets. “Am totally tricked out by Uncle Jeffrey today! Jeffrey boots, handbag, and watch!” she wrote in a January 2019 email.
Ruemmler insists she regrets knowing Epstein and was unaware of his criminal conduct. “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,” the outgoing bank lawyer told reporters.
Ruemmler served as White House Counsel under former President Barack Obama before joining Goldman Sachs. She later became one of the bank’s most senior executives and sat on internal committees on reputational risk and conduct.
Goldman Sachs in frenzy after Ruemmler’s ‘forced’ resignation
According to several current and former executives within the American bank, there is frustration towards how CEO Solomon has handled the news about Ruemmler. Some board members who are reportedly against Solomon’s support for Ruemmler said he could harm Goldman’s reputation.
“It’s a distraction, and it’s embarrassing,” said one person close to a board member before her resignation. “It’s not the board’s job to hire and fire people. That is the CEO’s role.”
Five former partners said they were surprised Solomon chose to publicly stand by Ruemmler, and expected the firm to distance itself more clearly from the controversy. Before her ties to Epstein became public, Ruemmler was internally liked for being disciplined, competent, and discreet.
The bank did not announce an immediate successor and has not revealed any interim leadership plans for its legal division.
Last week, at another law firm affected by the Epstein ordeal, Brad Karp stepped down as chair of Paul, Weiss, Rifkind, Wharton & Garrison after his ties to the sex trafficker appeared in the latest document release. Karp said the disclosures had placed all the focus on him, and “that is not in the best interests of the firm.”
In a 2015 email, Karp thanked Epstein for inviting him to “an evening I’ll never forget.” A 2016 email showed Karp asking for his assistance in securing a job for his son on the set of a Woody Allen film.
