Wall Street is in a whirlwind after disgruntled Goldman Sachs executive, Greg Smith, tendered his resignation via the op-ed pages of the New York Times, and in the process, publicly blasted Goldman for betraying its historic culture and putting profits ahead of client interests.
Mr. Smith described himself as an executive director and head of Goldman’s US equity derivatives business in Europe, the Middle East and Africa. According to him, ” the interests of the client continue to be sidelined in the way the firm operates and thinks about making money.” He further adds, “Goldman Sachs today has become too much about shortcuts and not enough about achievement.”
Goldman Sachs wasted no time in rejecting Mr. Smith’s claims. “We disagree with the views expressed, which we don’t think reflect the way we run our business,” a Goldman spokeswoman said. She added, “in our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.” Moreover, Mr. Smith’s position was identified as vice president, a relatively junior position held by thousands of Goldman employees around the world.
Meanwhile, a former Goldman Intern said of Mr. Smith, “I hold him in very high regard – he took care of us junior guys, gave us great pieces of advice, and in general came across as one of the more personable, friendly, and genuine guys on the floor.”
On the market front, as of this writing, Goldman Sachs stock is down by 3% following the news.
Update 1: Goldman Sachs CEO Lloyd Blankfein & COO Gary Cohn issued an internal response to Greg Smith’s op-ed piece, where they state, “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.” They go on to add, “in a company of our size, it is not shocking that some people could feel disgruntled.”
Update 2: An email is reportedly circulating around Goldman Sachs in the vein of (in fact, even more than that) “Jerry Maguire”, the film.
P.S. The very funny Stephen Colbert’s take on it all!