Throughout most of the Middle Ages, Constantinople was Europe's largest and wealthiest city — an icon of success. But in 1453 it was conquered by the Ottomans, marking the end of the Byzantine Empire which had lasted for over 1,100 years.

Some historians argue its fall was a direct result of its hubris and its lack of respect for forces outside the city's walls. On Tuesday last week, Goldman Sachs, a modern-day icon of capitalism, was attacked.

The US Securities and Exchange Commission recently charged Goldman and an employee with fraud because they were accused of failing to disclose that a hedge fund that had influenced the composition of a complex mortgage-debt transaction was also shorting it.

Goldman's boss, Lloyd Blankfein, and six other current and former Goldman investment bankers testified before the Senate Permanent Subcommittee on Investigations.

The assault, which lasted more than ten hours, was as hostile as any hearing of Wall Street executives could get. Goldman continues to vigorously deny any wrongdoing.

They have offered the "caveat emperor" defence and suggest the investors were offered all the information required to make an informed decision. They also argue that they are market-makers in this transaction and not money managers. Thus they owe no fiduciary duty to the clients but only offer "risk exposures".

But this is not really a legal issue. Ultimately this is an ethical one.

Goldman will now be forced to defend its vital currency. A product that it cannot hedge. A concept that takes years to build but only a split second to destroy. An asset that is extremely hard to regain once lost — trust.

Is a firm that claims to be client-centred, yet bets against the products it sells, worthy of customer trust?

Wharton School finance professor Richard Herring recently said: "If you view your clients as adversaries, you're likely to have many fewer of them."

Businesses survive by selling a product, service or skill. But success is not guaranteed unless people desire it and trust in it. The moment someone suspects your motives, everything you do becomes tainted and subject to mistrust.

You may have an excellent product and stellar records of successful service but if you don not command respect and trust you will never enjoy long-term success.

The value of acting as a fiduciary in the best interest of your clients and customers is many times underrated. It is, however, an indispensable quality that affects every business relationship and should be a character that is emphasised in all dealings.

Goldman may not be overrun at this point. But it appears it will be under siege for a long time.

Nathan Kowalski is the chief financial officer at Anchor Investment Management. He holds a Chartered Financial Analyst (CFA) designation and Chartered Accountant (CA) designation. Anchor Investment Management Ltd. is licensed to conduct investment business by the Bermuda Monetary Authority. To contact Anchor, e-mail info@anchor.bm or phone 296-3515.