Goldman Sachs Exec Quits, Claiming Firm Is Morally Bankrupt
In what may become a textbook example of how to burn a career bridge, a soon-to-depart Goldman Sachs employee has sounded off in an op-ed in The New York Times, warning that the investment bank's culture is little more than a toxic stew of greed that bears little resemblance to its once illustrious past.
Greg Smith (pictured), who serves as head of the firm's U.S. equity derivatives business in Europe, is leaving the firm today after 12 years with the Wall Street icon. As Smith writes, his departure is being driven by what he says is a shift in leadership style that no longer places clients' interests ahead of the firm's.
In his piece, Smith pulls no punches, holding current CEO Lloyd Blankfein and President Gary Cohn accountable for losing hold of the firm's once cherished culture that valued clients' interest above all else and helped make Goldman Sachs the world's premier investment bank.
"[T]he interests of the client continue to be sidelined in the way the firm operates and thinks about making money," Smith writes. "I truly believe that this decline in the firm's moral fiber represents the single most serious threat to its long-run survival."
The Goldman Sachs of today not only places little concern in the needs of its customers, says Smith, who is based in London, but internally mocks them.
"I don't know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client's goals? Absolutely. Every day, in fact."
Of course, not everyone believes Smith's rant was simply a polemic written by a well-intentioned albeit disgruntled employee.
As conservative opinion writer David Frum tweeted: "Nice of NYT to give Mr. Smith such a prominent ad for his new financial firm," apparently referring to a new venture Smith is embarking on.
Many other voices across Twitter weighed in. Robert Peston, business editor for the BBC, wrote: "This attack on Goldman Sachs from resigning exec is astonishing. The damage to the firm could be pretty serious."
Investment manager and media contributor Prashant Agrawal tweeted that Smith's column is "about to become the most famous #quit letter ever."
Others were more whimsical, such as this from Slate political reporter Dave Weigel, who tweeted: What I learned today: There's a job opening at Goldman Sachs. #dollardollarbills"
What's the potential fallout from Smith's rant? In The New York Times' own reporting on Smith's column, it observes, "The way he resigned from Goldman Sachs, and what he had to say, could reignite a debate over how much Wall Street has changed in the wake of the financial crisis."
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David Schepp has spent more than a dozen years covering business news for the electronic and print media, including Dow Jones Newswires, BBC News, Gannett Co., and most recently at AOL's DailyFinance. Nearly 10 years ago, he started writing a weekly People@Work column, looking in depth at issues facing workers in today's workplace. Follow David on Twitter. Email David at email@example.com. Add David to your Google+ circles.more...