Goldman Sachs employee quits spectacularly
A Goldman Sachs employee burned all his bridges after publishing in the New York Times a top to bottom attack of his employer.
Greg Smith's op-ed contribution appeared in the newspaper of record on Wednesday. Smith announced he was resigning from his position as executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.
The 12-year-vetran's main criticism of Goldman Sachs was that it placed profits ahead of the client's interest:
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.
It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.
These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.
Goldman Sachs' bosses, executives Lloyd Blankfein and Gary Cohn, responded in a memo to employees writing that it is not surprising that in a company of 30,000 someone may feel disgruntled.
"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."
Smith has a record of achievement that would attract Goldman Sachs, a firm that only hires the best of the best. Smith says he was a Rhodes Scholar national finalist and was granted a full scholarship to go to Stanford University.