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Greg Smith and Goldman Sachs

Posted by Larry Doyle on October 19, 2012 7:09 AM |

Greg Smith created quite a splash last spring when he announced his resignation from Goldman Sachs in an op-ed piece in The New York Times. That bit of sensationalism created quite a stir on Wall Street but what are we to expect in a day and age when an industry has provided plenty of reasons to be vilified and an insider feeds the fish.

Am I going to go out and buy Mr. Smith’s book? Based on excerpts I have read so far, I think I would be more inclined to borrow it from the library. Why so? 

Smith maintains that the Goldman Sachs he knew had changed. Really? Smith began working at Goldman at the turn of the century. He was more than a few years late to the major shift in Goldman’s business posture. From my experience competing against Goldman Sachs starting in the early ’80s, the firm took more of a proprietary bent beginning in the mid-90s and accentuated that approach in the years since. By the time of Mr. Smith’s arrival as an analyst and subsequently as a salesman, Goldman’s proprietary business model was well established. I highlighted as much in writing How Does Goldman Sachs Operate? back in 2009.

The firm clearly has a franchise to protect and not surprisingly has been proactive in attempting to discredit this former Vice-President. That is to be expected. In regard to Mr. Smith, congratulations in landing a big advance for the book. Great country, America.

I am no apologist for Goldman Sachs and have railed on the firm plenty over the years both in writing and on CNBC for shortchanging their own reputation in pursuit of profit. Will Mr. Smith’s soon to be released book, Why I Left Goldman Sachs, provide even more revelations of this sort? If the excerpts released are supposed to provide the bait, Smith’s fame may be fleeting and you may want to save yourself the cost of the book.

Larry Doyle

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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 so that investor confidence and investor protection can be achieved.

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