Goldman’s Greg Smith Skewers Firm, Airs Dirty Laundry
Posted by Larry Doyle on March 14, 2012 8:25 AM |
Thanks to a regular reader for sharing a New York Times editorial which will captivate Wall Street today.
Our friends at FINRA who may be faced with real backlash from the news spreading of their losing 8 hours of testimony in an arbitration case might want to buy lunch and dinner for Goldman Sachs’ senior executive Greg Smith.
Perhaps I should say former senior executive Greg Smith as he admits that today will be his last day at the firm. What else does Mr. Smith have to say? A LOT and if you see smoke rising off the top of 200 West Street today it is likely the steam rising from the heads of Lloyd Blankfein, Gary Cohn, and the other chiefs at Wall Street’s dominant firm.
Goldman is likely already on the horn to its PR firm in light of Smith’s expose about the firm. He launches these bombshells about life inside Goldman amongst others:
I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money.
I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.
I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.
How did we get here? 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.
It makes me ill how callously people talk about ripping their clients off.
I am not overly surprised to see a commentary of this sort. When business declines (see my commentary, Trading Volumes Plummet, “People Choose Not to Play”), the knives come out and the environment becomes lethal. Is Mr. Smith a disgruntled junior malcontent? Not exactly. He was only the…..
…..executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.
Hopefully these appetizers will compel you to consume the entire commentary in today’s New York Times entitled, Why I Am Leaving Goldman Sachs.
Would you be in a hurry to do biz with the crowd at Goldman after reading this? Might Mr. Smith have liability for speaking so openly about the firm?
Thank you again to the reader who brought this story to my attention.
Do your friends, family, and colleagues a favor and get them to do the same. Thanks!!
I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.