Moral Outrage
Whew! God help us!

Goldman Sachs disdain for its clients

An executive resigning from Goldman Sachs, the powerful investment bank, said in a blistering essay that the company had lost its “moral fiber” and said managing directors there referred to clients as “muppets.”

Greg Smith, an executive director at Goldman, said the company needs to “weed out the morally bankrupt people” and suggested the erosion of Goldman’s culture threatened its survival after 143 years.

“If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all,” he wrote.

Goldman is one of the most influential companies on Wall Street and has been called the New York Yankees of finance. Its alumni have advised presidents and run other major companies. Among its former CEOs are Henry Paulson, who left the company to join the administration of George W. Bush and pushed for the $700 billion bank bailout during the 2008 financial crisis, and Jon Corzine, the former governor of New Jersey, whose helming of MF Global resulted in a notorious $41 billion bankruptcy filing.

According to Smith, who worked at Goldman for over a decade, “if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.”

[AP]

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One Response to “Goldman Sachs disdain for its clients”

  1. In addition to heading Goldman’s equity derivatives trading in Europe, the Middle East and Africa, Greg Smith was involved in recruiting new talent for the company. It was his supervision over recruits being exposed to the increasingly corrupt Goldman culture—amid routine reference to clients as “muppets” and chortling about “ripping eyeballs out”—that finally turned him off.

    Smith’s charge about Goldman “routinely ripping their clients off” resonated widely on the Internet because of prior exposures of suspect derivatives deals in which Goldman explicitly bet against the products it was selling. Slightly less than two years ago the Securities and Exchange Commission filed fraud charges against Goldman that resulted in a $550 million fine over such double-dealing.

    But what is so damning about his Op Ed article is Smith’s insistence that the culture of Goldman has only gotten worse since then.

    By the time you read this, the PR hacks of Goldman Sachs will be vigorously pressing their efforts to destroy the reputation of whistle-blower Greg Smith.


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