By KATE KELLY
Goldman Sachs Group Inc.’s thrashing in Washington left many employees angry, some discouraged and others worried their email and other internal documents could be snatched by regulators and investigators.
“Let me remind you that we should anticipate continued external focus on Goldman Sachs for the foreseeable future,” Goldman Chairman and Chief Executive Lloyd Blankfein said in a voice-mail message to employees after what he described as a “rigorous” hearing by the Senate Permanent Subcommittee on Investigations on Tuesday.
“Please do not let this distract you from your daily responsibilities,” he said.
Bloomberg NewsGoldman Sachs’s employees paid close attention to the testimony of firm officials, some from local watering holes. Here, company headquarters.
Some employees of the New York company told each other how unfair it seems to them that Goldman is being singled out for betting against the housing market in 2007 as it was pitching mortgage-backed bonds to certain clients. Many other Wall Street firms did the same thing but escaped the relentless, nearly 11-hour pummeling Goldman got.
According to employees, Goldman managers have urged them to keep a low profile, think carefully about the restaurants and parties they attend and watch how they behave in public. Some employees are even reluctant even to go out to lunch with co-workers for fear of being overheard talking about Goldman, said one person familiar with the matter.
On Wednesday, Goldman employees still were sizing up the performance of Mr. Blankfein, accused trader Fabrice Tourre and other current and former executives who testified before the Senate panel.
Some people at the firm said Mr. Blankfein seemed insufficiently apologetic, focusing too much on Goldman’s role as a trading operation and not enough as a trusted underwriter securities sold to clients.
A Goldman spokesman declined to comment.
One particularly shocking disclosure to Goldman’s current mortgage traders, according to one of them, came in the employee performance reviews that were unearthed by the Senate committee. Some traders wondered aloud if their own internal communications would remain private.
Traders, including those in the fifth-floor mortgage division of Goldman’s headquarters at 200 West Street in lower Manhattan, have been reminded by their bosses to stay focused and keep doing business as usual despite all the distractions, according to people who heard the remarks.
Before Tuesday’s hearing, Jeffrey Verschleiser, one of Goldman’s mortgage-division heads, spent days poring through email and other documents to help executives prepare for their testimony, said people familiar with the matter. Other employees in the group assisted.
As the hearing dragged on, employees and alumni fired text messages, emails and instant messages back and forth about the group’s performance. One Goldman employee said he was invited to tag along with a group of traders who said they were heading to a bar to watch Mr. Blankfein’s testimony.
He said they joked that they planned to down a shot of liquor every time the CEO used the word “synthetic,” a reference to the type of collateralized-debt obligation for which Goldman has been accused of fraud by the Securities and Exchange Commission.
Goldman denies any wrongdoing.
—Carolyn Cui and Joe Bel Bruno contributed to this article.