Banking is a tough business. The entire business model is built on risk: Make a loan today and hope to collect on it in the future. The economy changes. Markets move irrationally. Businesses evolve. Things happen that are outside anyone's control.

When you buy a bank stock you accept this. You accept that the company is leveraged 10 to one (or more). You accept that some loans won't be repaid. You accept that the very fabric of the bank is sewn with risk.

You accept it because you trust the bank's management. You accept it because you have faith in the company's risk culture. 

Without trust in the way the company does business, that stock must be avoided. For me, one bank above all others simply cannot be trusted. Based on its past behavior, I've lost faith in this institution.

Enter Goldman Sachs
Once celebrated as the smartest bank on Wall Street, Goldman Sachs (GS -1.00%) has only recently been exposed for the greedy, profit-before-all-else operator it really is.

Those are strong words, yes, but they are justified by the bank's behavior. By some standards, that characterization might be on the soft side.

In perhaps the most famous and colorful depiction of the bank, Matt Taibbi of Rolling Stone said of Goldman that "the world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

A laundry list of scandals
Goldman has been in the news repeatedly since the financial crisis for a variety of misdeeds, ethically questionable practices, and even downright manipulations of the market. 

The bank paid a $550 million fine for selling certain mortgage-backed securities to clients while at the same time betting against those securities with the bank's own capital. But dealing in conflicts of interest is only the tip of the iceberg.

The bank made headlines after reports emerged of price manipulations in the aluminum market, where Goldman (and, to be fair, other megabanks) purchased raw aluminum along with the storage space for that aluminum. With almost complete control of the supply, the bank was able to manipulate the futures market for the metal to raise prices, while also delaying deliveries to boost revenue in the storage business.

The Huffington Post likened the scheme to "pulling an Enron," referring to the 2001 corruption scandal that sent the massive energy company into bankruptcy, wiping out shareholders. 

Goldman has been linked to a collusion of scandals that defrauded U.S. municipalities out of millions, currency exchange rate manipulations, and even scamming one African government out of $1.1 billion. The list just goes on and on and on.

An unsafe business model
Ignoring my ethical objections just for a moment, I consider Goldman Sachs to be far too risk tolerant as a bank.

By doing business on the fringes, Goldman is exposing itself to future legal liabilities, regulatory actions, and civil fines. And that doesn't even begin to touch on the financial risk baked into everyday business at the bank. One highly respected, old-fashioned bank CEO has called the entire operation an "unsafe business model."

The majority of Goldman's profits are driven by the bank's trading business, a volatile business to say the least. The bank's stock has plummeted in recent weeks after the bank reported a 12% decline in year over year revenue, driven by a 29% decline in fixed income trading over the same period. The stock is down nearly 11% in January alone.

The challenges of trading successfully are compounded by new regulations that force bank holding companies, like Goldman, to eliminate proprietary trading and divest ownership in hedge funds and private equity interests. 

It's your money -- invest it in what you trust
Goldman isn't a traditional bank, even though it is organized today as a bank holding company. The company is an investment bank through and through. It relies heavily on trading, a fickle business that requires a constant edge on the market to outperform. Unfortunately, the evidence points to use of nefarious and unethical practices to generate that edge.

The executive leadership driving Goldman today has been in place since 2006. CEO Lloyd Blankfein managed the bank before, during, and after most of these scandals. That, to me, indicates he has sanctioned this culture and these business practices.

And for these reasons, at the end of the day, I simply can't trust Goldman Sachs.