May 6th, 2010, 4:01 pm · posted by Martin Wisckol, Politics reporter
Steve Poizner has been trying to sully fellow GOP governor candidate Meg Whitman for receiving preferential initial public offering stocks from Goldman Sachs in 2002, so it was natural she was asked about it when she visited the Register this morning.
A major investor with the investment firm, Whitman received the stocks, then sold them for a profit when they went public and prices increased – a practice called “spinning.” She was eBay CEO at the time and also served on Goldman Sachs’ board.
Whitman later resigned from the Goldman Sachs board saying it was not a “good fit” and settled a lawsuit by an eBay shareholder by giving up her profits from the IPO stocks. The suit had to do with eBay using Goldman Sachs for banking while Whitman was receiving the stocks.
The type of spinning she had practiced has since been banned, but she told Register editorial and news writers this morning that it was common and uncontroversial at the time.
“Here are the facts on Goldman Sachs,” she said. “The truth is that I was on the board over eight years ago for 15 months, stepped off the board because I didn’t think it was a good fit. This was before any of the current controversy erupted.”
Whitman was referring to recent Congressional hearings that included testimony from Goldman Sachs on past lending practices.
“With regard to the IPO shares, as a brokerage client of Goldman Sachs, my husband and I did get IPO shares. It was a perfectly legal, perfectly standard practice in Silicon Valley. No one ever suggested there was a conflict of interest. I didn’t see it. The media didn’t see it.
“Nobody really saw there was a conflict of interest until the dot-com bubble burst and then there was a lot of to-ing and fro-ing about who was responsible.
“I can understand what the assertion is. I can tell you that there was no connection between my private brokerage account and who I picked as eBay’s bankers. This would be a completely crazy thing to do, because my net worth was far more tied up in eBay stock than in the $1.8 million I made from Goldman Sachs’ IPO shares.”
Indeed, Whitman’s net worth was put at $1.3 billion by Forbes in 2008.
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