☰ Menu eFinancialCareers

Goldman’s head of US EMEA equity derivatives has left AND written a scathing article about the firm’s unscrupulousness

Poison pen

Poison pen

This is a first. Usually, when someone leaves Goldman Sachs – or any bank – they sign a compromise agreement ensuring their silence upon pain of forfeiting their stock.

Not Greg Smith, former head of US EMEA equity derivatives at Goldman in London.

Smith has written a long article, just published on the New York Times’ website, titled ‘Why I am Leaving Goldman Sachs.’

It seems sure to become a hit and is the first PR failing for the firm in the post Lucas Van Praag world.

Smith, a South African, joined Goldman 12 years ago. During his time, he recruited and mentored graduates and is one of 10 people to appear on the firm’s student recruiting video (which may now need to be redone).

Toxic, destructive, callous and ‘ripping out eyeballs’

He describes the environment at Goldman as, “toxic and destructive,” and says the interests of the client are being sidelined in the interest of making money for the firm. It’s all become about encouraging clients to, “trade whatever will bring the biggest profit to Goldman.” Goldman staff are callously ripping clients off, he alleges, “it’s purely about how we can make the most possible money off of them.” And senior managers have been referring to clients as ‘muppets’ in emails and referring to “ripping eyeballs out.”

It wasn’t always like this. When he joined as a summer intern back in 2000, Greg says Goldman was a place of: “teamwork, integrity, a spirit of humility, and always doing right by our clients.” Lloyd Blankfein and Gary Cohn are behind the subsequent moral dissolution, he suggests.

Will this hasten Blankfein’s exit? Maybe, although he will apparently be replaced by Cohn, so the culture alleged by Greg seems unlikely to change much.

And what will Greg do next? Is this his parting shot from the industry, in which case he won’t care about the notoriety that will undoubtedly result from this. Or does he intend to resurface elsewhere (in which case he may have had all his stock bought out)? According to the FSA register, he’s only been registered in London for a year. It has been pointed out that Greg may be peeved that, having spent 12 years at Goldman, he still hadn’t been made MD.

Comments (7)

Comments
  1. I managed to comment on this article before cityhag got here!

  2. I hope this will encourage a few more people to talk about the true nature of this IB and the people who run it. Unfortunately not an isolated case in this industry and in others as well. I am not pretending being a saint but they are lines that I will never cross.

  3. ad1308, I salute you! Sometimes we iconoclasts have to take a nap…
    This is both good and sad. The so-called ‘collegiate culture’ of GS is a myth. It’s only collegiate if you’re in the magic circle. Sad, because when Mr Cityhag started working there he was inspired by the sheer professionalism and decent culture. Soon changed, of course, and he realised that it was turning into just another money-grubbing bank like all the others. If Greg Smith was a partner, he won’t need to do much for money, honey, so I’ll watch any move he makes with interest. And Yes. Let the Sh*t Hit The Fan now that LVP is no longer in charge of Corp.Comms. He did a wondrous job and – I’m willing to bet – could have headed this off at the pass. Maybe better for the bank in the long run that he didn’t, tho’..

  4. Actually, Cityhag does not have enough to do, having suffered from ‘Career Choke’. Hence ubiquity on websites…

  5. Oops. 12 years and not made partner. He wasn’t in the magic circle then. It does exist, and is ruthlessly policed. Mavericks need not apply. As a Sarth Effrican, maybe Smith wasn’t smooth and sweet where and when he needed to be. People I know who made partner would not think anything of knifing a colleague, but are terribly good at covering their tracks. I’m thinking equities, too. Lloyd B? I predict a demise, but not an early one. They have to get their ducks in a row.

  6. Well, ad1308, I certainly think your ‘comment’ adds to this piece significantly.
    My bet is that Greg Smith knows exactly what he’s doing and has a second career lined up, possibly a book already written..? He now has publicity and the implicit backing of the New York Times… genius. If I had the choice I wouldn’t be working in IB right now either.

  7. MsCityHunter, don’t knock ad1308. At least he’s adding to the gaiety of nations. Much needed at mo. As for Greg Smith, I doubt he has a book lined up. I think he reached a point of disgust that surmounted his personal fear zone, because what he’s done is rule himself out of pretty much every IB on the planet. They like nice little obedient folk who do what they’re told, when they’re told, and never admit to wrongdoing.

The comment is under moderation. It will appear shortly.

React

Screen Name

Email

Consult our community guidelines here