Source: Vanity Fair Hive
By: William D. Cohan
As the investment bank faces scrutiny for its treatment of first-year analysts, a case involving allegations of physical violence and a toxic, frat-house culture is scheduled to go to trial later this year.
Last month, a number of clever young bankers at Goldman Sachs managed to get Wall Street’s attention by putting together an official-looking PowerPoint presentation that decried their working conditions, including their absurdly long hours and their lack of sleep. According to 13 first-year analysts—typically recent college graduates occupying the lowest rung on Goldman’s investment-banking ladder—who responded to the survey, for the week ending on February 13, they had worked a “mean” of 105 hours a week, hitting the hay on average at 3 a.m. “Being unemployed is less frightening to me than what my body might succumb to if I keep up this lifestyle,” explained one analyst. Added another, “What is not ok to me is 110-120 hours over the course of a week! The math is simple, that leaves 4 hours a day for eating, sleeping, showering, bathroom and general transition time. This is beyond the level of ‘hard-working’, this is inhumane/abuse.”
Goldman seemed contrite by the cri de coeur from some of their youngest employees and pledged to do better, even though rules were already in place limiting hours. “We recognize that our people are very busy, because business is strong and volumes are at historic levels,” a Goldman Sachs spokesperson told me at the time. “A year into COVID, people are understandably quite stretched and that’s why we are listening to their concerns and taking multiple steps to address them.”
Then there is Patrick Blumenthal’s story, which, if accurate, brings the alleged abuse at Goldman Sachs to another level entirely. According to Blumenthal’s February 2020 lawsuit against Goldman and his onetime supervisor, Julius Erukhimov, Blumenthal worked as an intern in the Goldman office in San Francisco between September 2017 and February 2018. When he started the internship, Blumenthal was a 20-year-old student at Drexel University, in Philadelphia. He probably thought he had caught the break of a lifetime by getting a Goldman gig. He was assigned to work with Erukhimov, a wealth adviser, who, according to a LinkedIn profile, had joined Goldman in 2015, after working at Neuberger Berman and at his own advisory firm, PPM Advisors. Erukhimov got an MBA from the University of Michigan, a bachelor’s at Cornell, and worked in leveraged finance at JPMorgan Chase for a year early in his career before spending another two years in health care banking at JPMorgan Chase, according to the profile.
According to the lawsuit, Goldman assigned Blumenthal to a team that referred to itself as “Team 007.” Erukhimov was also on Team 007. “Goldman Sachs fostered a fraternity culture,” according to Blumenthal’s complaint, which was filed in the California superior court in San Francisco. Often during Blumenthal’s short tenure at Goldman, according to the lawsuit, there were “many incidents of hazing,” where Erukhimov and other team members “took advantage” of Blumenthal’s “youth and vulnerability.” Blumenthal wrote that Erukhimov was “very physically aggressive” and once threatened to “punch” him if Blumenthal didn’t tell Erukhimov “something that someone had said about him.” Blumenthal alleged in the suit that it was “well known” around Goldman that Erukhimov “had a habit of getting drunk and punching people.” Blumenthal claimed that he was treated as a fraternity “pledge” and that his nickname, “Bloomy,” was pronounced “Blew Me.” Erukhimov was known on Team 007 as “Fast Julie.”
Blumenthal claimed he was “bullied” from the start. The suit cited a Goldman kickball party at Fort Mason, where he was “pressured to drink despite being underage.” He wrote he “was teased and made fun of” and told to expect to take “an infinite amount of shit from people.” Emails were sent to the entire Team 007 falsely suggesting that Blumenthal was the illegitimate son of Goldman’s chief investment officer. (This was funny, apparently, because Blumenthal bore some resemblance to the Goldman executive.)
Like a college frat, Blumenthal alleged, there was lots and lots of drinking. “Drinking alcohol was always required at Goldman Sachs events,” he alleged. Erukhimov encouraged Blumenthal in the excessive drinking—Blumenthal turned 21 during his internship—and told him to take both Tums and Adderall so that he could drink more, the suit alleges. A couple of months into his internship, Blumenthal alleged, he spoke with Michelle Kelly, the Goldman executive who hired him, and asked to be removed from Team 007 to work elsewhere at Goldman. He claimed she acknowledged he was being treated “poorly,” but she did not reassign him.
Then came the alleged “incident.” On February 9, 2018, Blumenthal wrote in his complaint, he was a having a drink at the Goldman office, as was the usual “First Friday” ritual. Afterward, a group of about a dozen Goldman employees went to Sauce, a nearby restaurant, for happy hour. At Sauce, Erukhimov allegedly told Blumenthal he would “teach him how to drink,” and then he started pounding on the bar until the bartender told him to stop. Then, Erukhimov allegedly punched Blumenthal in the stomach and asked him to punch him back. The slight Blumenthal—five feet five inches, about 140 pounds—declined. Erukhimov, five feet 10, approximately 200 pounds and “buff,” allegedly punched him again and started to aggressively wrestle with Blumenthal. Next thing he knew, the suit claims, Erukhimov had pushed Blumenthal out on to Sauce’s patio, where a bunch of other Goldman employees were sitting. Blumenthal found himself in a “chokehold,” from which he could not escape. Erukhimov allegedly held him “so long” in the choke hold that he “thought he was going to die.” None of the other Goldman employees, including a number of senior managing directors at the firm, did anything to help Blumenthal, he claimed. “They simply sat and watched the brutal attack unfold,” he alleged.
Blumenthal passed out. He urinated on himself, “a bodily response to prolonged oxygen deprivation,” per the lawsuit. Nobody called an ambulance, Blumenthal claimed. A Sauce employee gave Blumenthal some ice. When Blumenthal regained consciousness, Erukhimov—“the very person who had just attacked and grievously injured” him—took him home to his apartment and allegedly gave him four “pain relievers.” Blumenthal alleged that Erukhimov warned him not to tell management about the incident or else Erukhimov’s uncle or his cousin would kill him. They were “contract killers” for Russian oligarchs, Blumenthal claimed Erukhimov told him. Blumenthal wrote that he believed the threat from Erukhimov was real and that Erukhimov had also previously told Blumenthal about his “extensive gun collection,” including assault rifles, and about how his cousin had left a bouncer at a nightclub in “a vegetative state” after the bouncer asked the cousin not to stand on a table. The night of the alleged incident, the lawsuit continued, Erukhimov also told Blumenthal that his uncle had once nearly decapitated someone who he had been paid to kill, with piano wire.
Two days later, Blumenthal went to the hospital, where he claimed he was diagnosed with a “hemorrhagic stroke.” He alleged in his lawsuit that he continues to suffer from some of the side effects of the incident—PTSD, mental anguish, a brain injury, and physical pain—some of which may be “permanent.”
Blumenthal waited more than a month to report the alleged incident to Goldman, according to the suit. He claimed he had feared for his life after Erukhimov’s threats, and that the physical and psychological aftereffects remained. He alleged he could not return physically to the Goldman office to complete the internship, nor could he return to Drexel. After about another month, Blumenthal heard back from Goldman H.R., in New York, that Goldman had “taken actions we have deemed appropriate,” according to the suit. After that, Blumenthal allegedly heard nothing else from Goldman. He was never interviewed about the alleged incident and Goldman did not report what happened to Drexel, he claimed in the suit. Goldman, he alleged, “swept this brutal attack under the rug and never spoke of it again.”
A Goldman spokesman disputes Blumenthal’s characterization of events, telling me that the former intern declined to be interviewed after he sent a letter to Goldman’s H.R. department. Blumenthal’s attorney, Dan C. Schaar, told me that his client had “no memory of, nor any emails from, anyone from [Goldman Sachs] (nor their investigators) contacting him for ‘further information’” between March 28, 2018, when Blumenthal emailed an H.R. executive, and her reply on April 22, 2018.
According to the Goldman spokesman, another employee had initially reported the incident involving the two men, which prompted the company to investigate it before—and after—Blumenthal’s letter to H.R. Goldman issued Erukhimov a formal warning in his employee file, according to the spokesman, who said there is no record of whether or not the company reported the incident to Drexel.
The case continues to grind through the California court system. In September, Paul Hastings, Goldman’s law firm, argued that Goldman had no responsibility for what happened, and that Blumenthal was not entitled to any damages, in part because he had failed “to exercise due care” and that this was his “own fault.” Goldman asked that the complaint be dismissed. In his response, Erukhimov made essentially the same argument as did Goldman. In an email, Kate Dyer, an attorney for Erukhimov, said “many of the allegations in Mr. Blumenthal’s complaint are demonstrably false.” Asked to elaborate, Dyer did not respond.
Blumenthal’s attorney claims to have shared a radiologist’s report with Goldman in late 2020. The report, Schaar told me, showed an area of dead brain tissue in his client’s right frontal lobe, which he alleges was caused by the attack. “This attack radically altered Patrick’s professional life and aspirations,” Schaar said of his client. According to Schaar, Blumenthal had a subsequent internship at Hercules Capital and then worked at another venture capital firm, Village Global, where he also made podcasts. Schaar says Blumenthal is currently unemployed and suffers from fatigue, headaches, and insomnia. “Patrick has had to redefine his plans and goals to fit this new life situation,” Schaar wrote in an email. The Goldman spokesman says Goldman has asked that Blumenthal also be examined by an independent medical professional, not just the radiologist Blumenthal went to.
In an interview, Schaar said Blumenthal’s court case got overshadowed by the COVID crisis, and typically, the legal process would be further along in the discovery phase by now. Though “still sort of in the shallow end of the pool,” he said the parties are getting into “pretty intense discovery.” Depositions will follow.
A jury trial is scheduled to start November 15. For his part, Erukhimov left Goldman in 2018—the same year of the alleged incident. According to his LinkedIn profile, after he left Goldman, also in 2018, JPMorgan Chase rehired Erukhimov as a vice president in its asset and wealth-management division.
