Goldman Sachs Exec Resigns in Scathing NYTimes Op-Ed
- Posted on March 14, 2012 at 11:52am by
Becket Adams
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Greg Smith, a Goldman Sachs executive, decided that he was through with his company and resigned this morning. But rather than simply giving his two weeks’ notice and leaving it at that, he decided that he would do a little something extra.
He decided to write an angry op-ed for the The New York Times, publicly denouncing what he calls Goldman’s culture of corruption. Smith, now a former executive director and head of the firm’s U.S. equity derivatives business in Europe, the Middle East, and Africa, had his op-ed published this morning.
“Today is my last day at Goldman Sachs,” Smith writes, “After almost 12 years at the firm…I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.”
Smith goes on to write that, unlike when he first joined the firm, Goldman is only interested in profits and its bottom line – even if it‘s detrimental to the clients’ best interests.
“How did we get here?” Smith asks. “The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.”
Of course, there are always exceptions to the rule.
Smith lists the unfortunate but “necessary” things an aspiring Goldman Sachs employee must do to achieve said “position of influence”:
a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit.
b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them.
c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.
But more than the inside games played by Goldman employees, Smith dislikes what he characterizes as the company’s general disdain for its clients.
“It makes me ill how callously people talk about ripping their clients off,” Smith writes. “Over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets,’ sometimes over internal e-mail.”
So who does Smith blame for bringing Goldman to the brink of ruin via a corrupt corporate culture? Goldman Sachs executives Lloyd Blankfein and Gary Cohn.
“When the history books are written about Goldman Sachs,” Smith writes, “they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.”
As would be expected with a public display of this nature, Smith’s letter has practically gone viral, spawning parodies while the term “Goldman Sachs” is already trending on Twitter, according to Business Insider.
UPDATE – Lloyd Blankfein and Gary Cohn have officially responded to Smith’s NYT op-ed (via Deal Journal):
By now, many of you have read the submission in today’s New York Times by a former employee of the firm. Needless to say, we were disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients.
…we wanted to remind you what we, as a firm – individually and collectively – think about Goldman Sachs and our client-driven culture.
First, 85 percent of the firm responded to our recent People Survey, which provides the most detailed and comprehensive review to determine how our people feel about Goldman Sachs and the work they do.
And, what do our people think about how we interact with our clients? Across the firm at all levels, 89 percent of you said that that the firm provides exceptional service to them. For the group of nearly 12,000 vice presidents, of which the author of today’s commentary was, that number was similarly high.
…
Our firm has had its share of challenges during and after the financial crisis, but your pride in Goldman Sachs is clear. You’ve not only told us, you have told external surveys…We are far from perfect, but where the firm has seen a problem, we’ve responded to it seriously and substantively. And we have demonstrated that fact.
It is unfortunate that all of you who worked so hard through a difficult environment over the last few years now have to respond to this. But, our response is best demonstrated in how we really work with and help our clients through our commitment to their long-term interests. That priority has distinguished us in the past, through the financial crisis and today.
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Comments (56)
bartjoebob
Posted on March 14, 2012 at 3:58pmThe Bernank buys the treasuries from The Goldman Sachs: http://www.youtube.com/watch?v=PTUY16CkS-k
Report Post »Gold Coin & Economic News
Posted on March 14, 2012 at 7:58pmI wonder if this will cause Goldman Sachs stock to tank?
Report Post »http://www.planforiraq.com/2012/03/will-goldman-sachs-stock-tank-because-of-toxic-culture/
Jaycen
Posted on March 15, 2012 at 1:05amI am an unabashed Capitalist.
Having read the reply by Lloyd Blankfein and Gary Cohn, it sure sounds like Goldman Sachs is in the “Decline” phase of the business cycle. They now rely more on masturbatory employee survey firms instead of actually talking to their people and knowing what happens day-to-day.
I’m just going by their rebuttal, but it sounds like they’ve insulated themselves from their own company. They don’t really have much of a clue.
Your inconsistent and indecisive leadership is an inspiration to us all.
Report Post »CLG 4
Posted on March 15, 2012 at 9:49amWE will just have to wait and see. GS being a corpoation only grows when customers make a profit. Is this a disgruntal employee or is GS really trying to commit corprate sucide.
Report Post »11:11
Posted on March 14, 2012 at 2:15pmprofits and bottom line, yeah that’s what makes the whole world go around, job ethics and pride in workmanship, pride in your job, caring for others, teamwork, accountability, naaah, that’s obsolete, and btw American Psycho was an awesome movie, highly recommended!
Report Post »NoNannyState4me
Posted on March 14, 2012 at 2:03pmI suppose “Big Gov Needs to Oversee You” Santorum or “Radical Progressive” Gingrich are better options that “I’ve been telling you idiots this for 30 years” Ron Paul eh?
If only Ron Paul would want to willingly go Police up, Bomb, and piss off all the Oil countries for Goldman Sachs and treat all Americans like terrorists when they travel (for our own good…) like ALL the other choices, he would be cherished more.
Sickening.
Report Post »OKC08GT500
Posted on March 14, 2012 at 8:32pmhttp://www.freerepublic.com/focus/f-news/2829309/posts
Report Post »NoNannyState4me
Posted on March 15, 2012 at 12:23pmI understand the ‘thought pattern’ behind your post. Heck, I was one of the guys who used to post that crap for years. Thing is, nothing gets better as a result of OUR pre emptive strikes on anyone. The only thing that has changed is more people in the world are sick to death of us (literally), we are near financial collapse, and our personal freedoms are nearly NON existent. And that started with Bush and is being further perpetrated by Oblama the race baiter.
Report Post »hi
Posted on March 14, 2012 at 1:54pmWow. It took him 12 years to figure that out? All I did was read Personal Finance for Dummies and got it after reading the first chapter!
It’s so funny when the broker says,”Well, you wouldn’t want a person doing his own “so and so” like your husband who is a specialist in his field. In the same manner, you aren’t qualified to invest your own money!’
Report Post »youdidthis
Posted on March 14, 2012 at 1:35pmbankers are resigning world wide.timmy the treasurer was arrested and sang like a canary.
Last week Geithner was arrested and released!
http://www.youtube.com/watch?feature=player_detailpage&v=q5j6Yk0qAgQ
search,find out for yourself
Report Post »Charybdis
Posted on March 14, 2012 at 1:06pmClearly this is a company that’s “too big to fail”. Expect OWSbama to call for a special stimulus package to keep them in business after this.
Report Post »Locked
Posted on March 14, 2012 at 1:29pmThey’re having no issues with failing right now. Goldman Sachs is hugely successful.
Report Post »4truth2all
Posted on March 14, 2012 at 3:29pmYo Locked:
Sounds like they are successful because they lie and cheat if you call that successful in the first place. Also sounds like they are building a successful house of cards and the wind is blowing.These poeple will be hunted down and shot in the streets when people lose everything they had when it all falls down. Course I could be wrong … so nevermind.
Report Post »Locked
Posted on March 14, 2012 at 4:35pm@4truth2all
“These poeple will be hunted down and shot in the streets when people lose everything they had when it all falls down. ”
… they were the single most powerful private force that caused the 2008 recession. It was their formula on packaging mortgages, and their efforts to deregulate legislature that allowed them to do it, that fell through and crushed the market. Their efforts to skirt the laws in the EU and hide their abhorrent accounting practices led to several countries (Iceland, first and foremost) going into a terrible debt spiral.
They certainly weren’t the only people who caused the recession (greed was everywhere), but they were definitely the ones who made out the best from it. Tell me; how many Goldman-Sachs execs were hunted down and shot in the street? Heck, tell me how many are in jail right now?
Report Post »4truth2all
Posted on March 14, 2012 at 5:31pmYo Locked:
We didn’t get to where we are going yet …but maybe you’re right, they might get away with it in this life.
Report Post »Melvin Spittle
Posted on March 14, 2012 at 12:46pmHis life expectancy will most likely develop interest on Intrade.
Report Post »watchtheotherhand
Posted on March 14, 2012 at 12:54pmHow many ex-Goldman Sachs employees are in the Obama administration?
Report Post »grudgywoof
Posted on March 14, 2012 at 12:55pmWe can’t be affraid to speak the truth. I salute this man and wish others were as brave to give up everything to tell the GS muppets how much they are being looked after. Darkness is falling on this country and it’s institutions and judgement day is comming.
Report Post »Melvin Spittle
Posted on March 14, 2012 at 2:01pmI am glad he came clean. Now that the info is public, I will grab some popcorn and observe the actions of the White House, congress, the media, SEC, DOJ, and the Occupy idiots. Standby folks as shenanigans are sure to follow.
I believe in smaller government. As these scandals surface, examples need to be made to send a message that if they do not clean house, then action will be taken. This clearly indicates how ineffective the SEC has become and we need an accounting for this. Time for an SEC enema in my opinion!
Report Post »red_white_blue2
Posted on March 14, 2012 at 12:44pmGood for him, speaking the truth!
Report Post »soybomb315
Posted on March 14, 2012 at 12:42pmwho is goldman sachs supporting? oh yea, obama and romney. SWEEEET
Report Post »Soquel by the Creek
Posted on March 14, 2012 at 12:41pmTop Contributors to Barack Obama in 2008
http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638
1. University of California: $1,648,685
Report Post »2. GOLDMAN SACHS: $1,013,091
3. Harvard University: $878,164
Gonzo
Posted on March 14, 2012 at 1:00pmNational Debt: Priceless
Report Post »Locked
Posted on March 14, 2012 at 1:29pmTop contributors to John McCain in 2008:
“Merrill Lynch $375,895
JPMorgan Chase & Co $343,505
Citigroup Inc $338,202
Morgan Stanley $271,902
Goldman Sachs $240,295″
Lesson to take away from it? These guys buy EVERYONE.
Report Post »youdidthis
Posted on March 14, 2012 at 1:51pmamazing, romney has the same backers.
Report Post »Cavallo
Posted on March 14, 2012 at 4:47pm@Locked, So Goldman-Sachs contributed nearly 5X as much to bobo? I’m not sure that really qualifies as even hedging your bet.
Report Post »Mike N
Posted on March 14, 2012 at 12:38pmI believe every word this guy has written . . . Goldman Sachs can see the market is doomed for a collapse, is making every near-term profit any way it possibly can, and is determined to be first out the exits when the bottom falls out.
Take notes everyone . . .
Report Post »Moozmom
Posted on March 14, 2012 at 12:37pmSo I asked the local bank, “Did you take any of the bailout dollars”. They replied, “Yes, and there are certain things we can and cannot do because we did take the bailout”.
Report Post »soybomb315
Posted on March 14, 2012 at 12:35pmHappy Gold Standard Day ya’ll
March 14, 1900 – U.S. currency went on the gold standard with the ratification of the Gold Standard Act.
Report Post »youdidthis
Posted on March 14, 2012 at 1:58pmhappy gold standard day
Report Post »COFemale
Posted on March 14, 2012 at 12:31pmSo this should tell everyone GREED and CAPITALISM do not mix, regardless of political affiliation. When they do mix, then we must act accordingly and hold these people accountable and send them away for LIFE. Do not pass GO, Do not collect ANY MONEY, and you go to JAIL FOREVER!
Report Post »It has to hurt, otherwise the incentive to not act in this manner will mean nothing. If they get a few years, they will do it again once they get out.
Female
Posted on March 14, 2012 at 12:42pmCan we start with the insider trading amongst congressional, senatorial, and presidential and cabinet members—plus relatives and privately owned businesses?
You scratch my back club members?
Report Post »youdidthis
Posted on March 14, 2012 at 1:54pmfemale,
Report Post »no , will never happen. congress will flop around and pass ‘security measures’.
no charges or investigations will be done.
hi
Posted on March 14, 2012 at 1:59pmI disagree. It’s called personal responsibility. You can‘t trust your money in someone’s hands. You have to be involved every step of the way. If one is dumb enough to trust the snakes, it’s his fault. The Bible says to be shrewd with your money.
Just like when you buy a car. You can’t just trust the guy with your money. You have to do your homework and learn to negotiate.
In fact, don’t trust anyone ever! That’s my motto. Actually, “Trust but Verify” is a better one.
Report Post »Gonzo
Posted on March 14, 2012 at 12:27pmIt took 12 years to figure that out? Now, for the rest of the story….
Report Post »COFemale
Posted on March 14, 2012 at 12:25pmNot surprising, Goldman-Sachs was and is run by DEMOCRATS. Didn’t our illustrious Corazine once have the position as CEO or something like that at Goldman-Sachs. So not only did he run them into the ground he bilked 1.2 billion dollars out of client funds at MF Global aka (Mother FN Global) This is no accident people and Corazine should be sitting right next to Bernie Madoff; Democrats call Republicans crooks. If that is the case, why is it your members are the jail birds?
In fact just about the whole Democratic party are the idolatry, the fornicators, and the thieves.
Wake up Democrats who do not fit this description yet, but are on your way.
Report Post »The_Jerk
Posted on March 14, 2012 at 12:32pmMarcus Goldman and Samuel Sachs weren’t Irish, they were both Jewish. Christ chased them out of the temple, but all that simply dispersed them. Nothing has changed.
Report Post »Avigdor
Posted on March 14, 2012 at 12:35pmNotice that Goldman-Sachs is a favored business due to its control by democrats. Sort of like what used to happen in fascist countries.
Why is it ok for leftwingers to now be rich? Because the left controls Harvard thus brainwashes all future CEOs?
Report Post »huufarted
Posted on March 14, 2012 at 1:36pmI am a Conservative Republican and Born Again Christian COFEMALE and am certain we are under Devine Judgement as a Nation! The things you see being done by the Dems are the symptom not the disease. God doesnt judge our nation because of the unrighteous but rather because we have ALL gone astray and become unrighteous…
Instead of blaming the Dems and ******** the believers in the USA need to pull on sack cloth and ashes and ask God what WE need to repent from!
Huuf
Report Post »4truth2all
Posted on March 14, 2012 at 3:36pmYo Huuf:
You make a statement here about repentence, and on another story you talk about cutting out parts of a woman’s body and feeding them to her … so, you go first, and stop talking such crap and calling yourself a born again believer … words are cheap.
Report Post »IndianaJan
Posted on March 14, 2012 at 12:22pmDon’t say it in the NY Times, Mr. Smith. Say it in a courtroom. I can’t wait until Ship Obama starts to sink, and the spineless, hypocritical rats sing for their lifeboats. Can’t wait.
Report Post »Iswingright
Posted on March 14, 2012 at 12:21pmExplains why the Obama administration hired many of their people. They fit right in.
Report Post »Locked
Posted on March 14, 2012 at 12:18pmNot too surprising. They had a major hand in collapsing Iceland’s economy a few years back (they helped them hide their debts through creative accounting, which was great until the truth came out and their economy sank like a lead weight), and have their hands in Greece, Spain, and Ireland.
I would add onto his comment about what the history books will say of Goldman Sachs. In the future, they’ll be what George Soros was in the early 1990s to England; a leading cause and the primary benefactor of economic collapse.
Potentially on a much grander, if less public, scale.
Report Post »The_Jerk
Posted on March 14, 2012 at 12:15pmGoldman Sachs, the temple money usurers. Nothing has changed.
Report Post »Defending Truth
Posted on March 14, 2012 at 12:14pmLiberals will use this to further their cries for wealth equality and regulation. But here is an ample showing of the Invisible Hand guiding the market just the way it was intended: if a company mistreats its clients, at sometime, in whatever way, the Hand will take the clients elsewhere and capitalism will show its efficiency. Hat goes off to Mr. Smith for exposing poor business practices and helping clients make better decisions about who to trust.
Report Post »Khthulhu
Posted on March 14, 2012 at 12:43pmI agree completely. I’ll go on to predict that papers are already being drawn for a law suit against Mr. Smith for defamation of Character. He’ll hopefully get immunity from civil suits if he cooperates with any federal or congressional investigation, if congress has the spine to investigate. At the very least the SEC should be executing putting together warrants to seize email servers. These traders need to be held accountable and the swamp needs draining. It‘s just too bad intentionally contributing to the economic collapse of a nation isn’t a hanging offense. Hats off to Mr. Smith. That took ball$!
Report Post »Female
Posted on March 14, 2012 at 12:12pmResig-naiton: thanks Blaze for making all of us in the comments section feel better about our multiple typos;)
The dude sounds a bit pissed. Hmmm, I am sure he is independently wealthy at this point and in no need of future employment. I imagine he cashed in all his Goldman Such’s stock options, cyoa, right? Now, watch to see if the stock falls.
Report Post »MaryAnne29
Posted on March 14, 2012 at 12:10pmLost the taste for the KoolAid, eh, Mr. Smith? Those 6 and 7 figure bonuses made it easy to swallow fiit for 12 years, I guess.
Given Goldman’s pervasive presence in the Administration, Mr. Smith would be well-advised not to take any walks after midnight near his house.
Report Post »Jenny Lind
Posted on March 14, 2012 at 12:10pmIt was a last straw kind of moment for him, he may never work again, and they will drag him through the mud, but I will respect him for taking a stand. Many may say it took him long enough, but he did take a stand. Every single person who finally decides for themselves enough is enough, and says no more is to be commended. We all get there in our own way, I know the moment when I said to myself I was done with statis quo, and took my own personal stand. I also did a spirtiual and emotional account of my life. Good for him, I pray they don’t destroy him.
Report Post »PrfctlyFrank
Posted on March 14, 2012 at 12:29pmI could easily believe that Goldman Sachs started out as a firm concerned about their clients. But what the Obama administration has done, and is doing, to morality in this country, I mean, what did you expect? The Communists know the fish rots from the top. We’re seeing a perfect example of, ” from the top rotten fish.”
Report Post »lukerw
Posted on March 14, 2012 at 11:53amScape Goat!
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