"As far as GS shorting, I doubt they do it in house on clients they underwrite. They would get busted. I am sure there are funds in Israel, Switzerland, and Hong Kong that does it for them."
I would venture that GS itself is not involved in such shorting even indirectly, however select GS partners who are involved in the deal or are gatekeepers for approving such deals likely have personal and family ties to offshore accounts that engage is shorting the dotbomb/social media GS IPOs.
There are invisible "firms within firms", as I'm sure you know or may have experienced. Getting a seat on the Management Committee, Ethics Committee, or Business Standards Committee is more sought after than a seat on the Compensation Committee. Why? Because if you sit on those committees you have the power to approve or deny deals, and as a gatekeeper you get an "in" on such deal information and can play on the long and/or short side through your "affiliate" accounts not in your name and fully deniable.
The concept that all partners need to disclose their financial interests to the partnership is a joke to anyone who knows how to paper the transactions.
You get on one of those committees and it is a guarantee of huge money and usually in low-tax/no tax jurisdictions to entities you can drain at your leisure when you retire.
AI
