Goldman CEO’s Loyalty to Lawyer Rattles Bank Even as She Departs

Goldman Sachs Group Inc., the bank famously good at managing risk in financial markets, had massively misjudged one facing its own reputation.

That much had become clear by the time Kathy Ruemmler, the firm’s general counsel, phoned Chief Executive Officer David Solomon on Thursday to hand in her resignation. The call came after a steady drumbeat of revelations from freshly released Justice Department files had detailed the close relationship she had with notorious sex offender Jeffrey Epstein.

David Solomon

Photographer: Jeenah Moon/Bloomberg

Solomon had stood by her as more information filtered out in recent weeks, bringing to light the ways in ...