Faith-Based Investors Lobby for Transparency in Big Banks

An interfaith group of investors have been lobbying some of Wall Street's biggest players to become more transparent in their financial transactions.

Members of the New York-based Interfaith Center on Corporate Responsibility (ICCR), which represents a coalition of over 75 progressive and conservative Protestant, Catholic, and Jewish groups, were among those at last week's annual meeting of Goldman Sachs shareholders who voted for more disclosure from the bank on its financial practices.

The shareholder meeting was heated both inside and out as protestors voiced their opposition against Goldman, who have been reeling under accusations of fraud related to 2008's collapse of the housing market.

In a strong call for an immediate shift in Goldman's business practices, 33 percent of shareholders supported an ICCR resolution calling for more disclosure on collateral in derivatives trading. The same resolution had earlier received a 30 percent vote at Citigroup's shareholder meeting and a 39 percent support level from Bank of America shareholders.

"ICCR members have been concerned about the opacity and complexity of the over-the-counter derivatives markets for a long time," said Cathy Rowan, a consultant for the Maryknoll Sisters and co-author of the resolution. "The resolution on disclosing collateral policy gave shareholders a chance to use their voice and vote to challenge Goldman Sachs to increase transparency and disclosure."

"I am hopeful that shareholders will continue to feel empowered to seek greater corporate accountability," she added.

Several other resolutions filed by ICCR members also received strong vote percentages during the meeting, including a 31 percent vote for political contributions disclosure, a 19 percent vote for separation of CEO and chair, and a 5.5 percent vote for pay disparity disclosure.

Goldman CEO Lloyd Blankfein struck a sympathetic tone with shareholders during the meeting when he announced that the bank would form a special committee designed to lead a "rigorous self-examination" of the group's business practices.

"We understand that there is a disconnect between how we as a firm view ourselves and how the broader public perceives our role and activities in the market," Blankfein told the group of some 250 shareholders. "To address this, we need a rigorous self-examination."

In a statement released on Friday, ICCR Executive Director Laura Berry commented that, "The activities that propelled today's shareholder meeting brought together the collective effort of active and engaged owners. With their long-standing commitment to transparency, appropriate incentive structures and vigilance regarding political influence, ICCR members raised issues that clearly resonated with the company's owners."

One of America's oldest and most established investment banks, Goldman Sachs came under fire last month from the U.S. Securities and Exchange Commission (SEC), who filed a $1 billion lawsuit against the bank for failing in its fiduciary responsibilities.

Sources say Goldman has begun settlement talks with the SEC, but a quarterly filing from the bank reported that more potentially damaging investigations and shareholder lawsuits are already lined up against them.

In the same filing, Goldman reported that it had gone through the entire first quarter of 2010 without a single day of trading losses – a first time feat for the bank, which earned $100 million in revenue during the period.

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