Head of Goldman Sach’s US Equity Derivatives in Europe, the Middle East and Africa says the environment within the firm is ‘toxic and destructive’.
In a damming opinion column for The New York Times, Greg Smith detailed what he sees as a fall from grace for the global investment and securities firm. On the day that new PR man Jake Siewart begins employment for the company, Goldman Sachs’ brand reputation could have taken a lethal blow.
Although Wall Street as an entity has received a barrage of negative press over the past year – most notably in the form of the Occupy Wall Street movements – this latest wound carries with it more weight due to the fact that it is being inflicted by one of their own.
Greg Smith started at Goldman Sachs as a summer intern whilst studying at Stanford University and devoted his career to climbing the ladder: he was picked as one of ten people out of a firm of 30,000 to feature in a worldwide student recruitment video; he advised two of the largest hedge funds in the world; five of the largest asset managers in the US; three of the most prominent sovereign wealth funds in the Middle East and Asia; and controlled a client asset base totalling over one trillion dollars.
He also played a huge part in the summer intern program for the students who were lucky enough to be selected for consideration – and it seems this is what grated on him the most:
“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.”
He felt the company had been running on a ‘secret sauce,’ a culture of integrity, teamwork, humility that always had the customers best interests at heart. But as that ‘culture’ was eroded away over time it was replaced with an avaricious desire to make higher profits, take larger margins, and to put it basely, mug off the ‘muppets’ that were once referred to as customers or clients. This left executive director Greg Smith extremely disillusioned with the company.
His resignation evokes similar emotions to that of the great tragedies. Like King Lear, Goldman Sachs has lost its way, and although the psychopaths of Wall Street may label Greg Smith a fool for walking out on such a lucrative position, the bridges that he has burnt in the process could prove more damaging to the ‘king’ of investment banking. Goldman Sachs appear to have forsaken their customers in a similar manner to the way in which King Lear disinherited his loving daughter Cordelia – and look how well that turned out for him.