Goldman's Luster May Be Fading

Can Goldman Sachs(GS Quote) get its white shoes clean again?

For a long time, Goldman had largely escaped the criticism that Merrill Lynch(MER Quote), Citigroup's(C Quote) Salomon Smith Barney and Credit Suisse First Boston(CSR Quote) had received for their investment banking practices. Yes, New York state attorney general Eliot Spitzer included Goldman among the Wall Street firms he was investigating. But Goldman has been burnishing its image as "different" in the past few months -- a little cleaner than its rivals -- and the efforts had been successful.

Then came the revelation late Wednesday that Goldman doled out coveted IPO shares to executives at 21 companies and may have engaged in "spinning" -- allocating IPOs to top executives as an incentive to win investment banking business. Goldman denies the spinning allegation, and some analysts agree with the firm. The company's stock eased 4% to $62.90 -- not much damage in these scandal-phobic days. ...