Morning Coffee: When David Solomon really likes you at Goldman Sachs. Dangerous teams in hedge funds

David Solomon, CEO of Goldman Sachs, doesn't always feel an affinity with individual employees. He seems to have had disagreements on strategy with Jim Esposito, for example, before Esposito left to become president of Citadel Securities.

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Solomon did not, however, fall out with Kathy Ruemmler, the woman who grew up in a rural town in Washington State and who became Goldman's chief legal officer and one of his personal advisors. Solomon reportedly hired Ruemmler himself, and she was one of his loyal lieutenants during the rocky start of his reign. Within a year of joining the firm, she was paid $21.5m, which was 75% more than her predecessor earned as general counsel. In 2022, Ruemmler went out to bat for Solomon after Bloomberg reported that Goldman paid $12m to a female partner who'd complained about sexist behaviour at Goldman Sachs. Bloomberg said this included an allegedly vulgar comment made by Solomon himself. “Bloomberg’s reporting contains factual errors, and we dispute this story,” Ruemmler told CNBC at the time. “- Anyone who works with David knows his respect for women, and his long record of creating an inclusive and supportive environment for women.”  

Now, though, Ruemmler is leaving Goldman Sachs. Like Brad Karp, the now-ex-chairman of elite law firm Paul Weiss, she says her presence in the Epstein files and the resulting media coverage has been a "distracton." “I made the determination that the media attention on me, relating to my prior work as a defence attorney, was becoming a distraction,” Ruemmler told the Financial Times.  

Solomon, however, is standing by his woman. After defending Ruemmler late last year as an "excellent lawyer," whose guidance, he said Goldman relied on "every single day,” Solomon said in a statement that Ruemmler "will be missed." - “Throughout her tenure, Kathy has been an extraordinary general counsel, and we are grateinful for her contributions and sound advice on a wide range of consequential legal matters for the firm,” he told the FT yesterday.

Other Goldman insiders do not seem so supportive. Before Ruemmler "regretfully" handed in her resignation, effective from June 2026, some at the firm were questioning Ruemmler's position at the helm of Goldman's conduct committee, where she was responsible for ensuring employees behaved with integrity. Some Goldman executives previously told Bloomberg they would have been fired for accepting gifts worth a fraction of the worth of those Ruemmler received from Epstein. Ruemmler has always denied that she asked for these gifts, which included a $9.4k Hermès bag, a $4.2k Fendi fur-trimmed plaid wool coat and a $1.7k Fendi bag. 

Now that Ruemmler's going, Goldman insiders are asking why Solomon stood behind her for so long. “It’s a distraction and it’s embarrassing,” one person close to a Goldman board member told the Financial Times. Former Goldman executives told the FT they felt “deep embarrassment”, “crushed” and “profoundly disappointed” by Solomon's ongoing support for her. 

Last November, the New York Post said Ruemmler sent out a series of emails to Goldman staff urging them to observe that “what and how you communicate reflects on you and the reputation of the firm” and to complete a module on “communications at Goldman Sachs.” If Ruemmler had followed her own advice during her communications with Epstein in her pre-Goldman Sachs career, she might still be at Solomon's side beyond June.

Separately, commodities traders have a tendency to come and go at hedge funds, which don't always have an appetite for the sector's volatility.

For a few years, natural gas traders have been all the rage, but recent extreme fluctuations in natural gas prices are taking their toll. Bloomberg reports that BlueCrest has ejected seven natural gas traders, including senior trader Alex Watson and his team after losses.

Commodities revenues can be volatile with natural gas revenues particularly so. Natural gas trading helped drive $4bn of profits for Citadel's commodities arm in 2024. In December 2025, though, Bloomberg blamed Citadel's poor 2025 returns on natural gas trading losses earlier in the year. These were subsequently recovered and the Citadel's business ended the year up. 

Gas trading is a risky business. Everyone wants the highs, but it remains to be seen whether hedge funds will also tolerate the lows. 

Meanwhile...

Jes Staley, ex-CEO of Barclays, was named as one of three trustees for the Jeffrey E Epstein 2014 Trust in notarised agreements signed and dated by him, including in May 2015. Last year, Staley told a UK court that this was not the case. (Financial Times) 

Jane Fraser had a 22% pay rise and is now earning $42m as CEO of Citi for 2025. (Bloomberg) 

CS Venkatakrishnan is only earning £15m ($20m) at Barclays. (Telegraph)

NatWest invested £1.2 billion in technology, AI and simplification in 2025. (Bloomberg) 

UBS expects to hire up to 3,000 people in India. It also expects to cut people in Switzerland. (Yahoo) 

There's no longer a concierge service for junior lawyers at Kirkland & Ellis. (Financial News) 

The Association of Financial Markets in Europe said that a blanket reduction of capital requirements for electronic trading firms would be a bad idea. (Bloomberg) 

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