Goldman Sachs 2015 Annual Report Download - page 55

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
In conducting our businesses around the world, we
are subject to political, economic, legal, operational
and other risks that are inherent in operating in many
countries.
In conducting our businesses and maintaining and
supporting our global operations, we are subject to risks of
possible nationalization, expropriation, price controls,
capital controls, exchange controls and other restrictive
governmental actions, as well as the outbreak of hostilities
or acts of terrorism. For example, there has been significant
conflict between Russia and Ukraine in recent years, and
sanctions have been imposed by the U.S. and EU on certain
individuals and companies in Russia. In many countries, the
laws and regulations applicable to the securities and
financial services industries and many of the transactions in
which we are involved are uncertain and evolving, and it
may be difficult for us to determine the exact requirements
of local laws in every market. Any determination by local
regulators that we have not acted in compliance with the
application of local laws in a particular market or our
failure to develop effective working relationships with local
regulators could have a significant and negative effect not
only on our businesses in that market but also on our
reputation generally. We are also subject to the enhanced
risk that transactions we structure might not be legally
enforceable in all cases.
A determination by the United Kingdom to exit or
otherwise significantly change its relationship with the
European Union could affect the manner in which we
conduct our businesses.
Our businesses and operations are increasingly expanding
throughout the world, including in emerging and growth
markets, and we expect this trend to continue. Various
emerging and growth market countries have experienced
severe economic and financial disruptions, including
significant devaluations of their currencies, defaults or
threatened defaults on sovereign debt, capital and currency
exchange controls, and low or negative growth rates in
their economies, as well as military activity, civil unrest or
acts of terrorism. The possible effects of any of these
conditions include an adverse impact on our businesses and
increased volatility in financial markets generally.
While business and other practices throughout the world
differ, our principal legal entities are subject in their
operations worldwide to rules and regulations relating to
corrupt and illegal payments, hiring practices and money
laundering, as well as laws relating to doing business with
certain individuals, groups and countries, such as the U.S.
Foreign Corrupt Practices Act, the USA PATRIOT Act and
U.K. Bribery Act. While we have invested and continue to
invest significant resources in training and in compliance
monitoring, the geographical diversity of our operations,
employees, clients and customers, as well as the vendors
and other third parties that we deal with, greatly increases
the risk that we may be found in violation of such rules or
regulations and any such violation could subject us to
significant penalties or adversely affect our reputation.
In addition, there have been a number of highly publicized
cases around the world, involving actual or alleged fraud or
other misconduct by employees in the financial services
industry in recent years, and we run the risk that employee
misconduct could occur. This misconduct has included and
may include in the future the theft of proprietary
information, including proprietary software. It is not
always possible to deter or prevent employee misconduct
and the precautions we take to prevent and detect this
activity have not been and may not be effective in all cases.
We may incur losses as a result of unforeseen or
catastrophic events, including the emergence of a
pandemic, terrorist attacks, extreme weather events
or other natural disasters.
The occurrence of unforeseen or catastrophic events,
including the emergence of a pandemic, such as the Ebola
or Zika viruses, or other widespread health emergency (or
concerns over the possibility of such an emergency),
terrorist attacks, extreme terrestrial or solar weather events
or other natural disasters, could create economic and
financial disruptions, and could lead to operational
difficulties (including travel limitations) that could impair
our ability to manage our businesses.
Goldman Sachs 2015 Form 10-K 43