March 14th, 2012
05:51 PM GMT
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London (CNN) – We’ve all seen it before: A disgruntled employee quits his or her job and takes that fateful decision of putting pen to paper in fiery fashion.

The result varies from a whiny monologue to a master class in corporate psychology, depending on how familiar you are with their firm.

Unfortunately for Goldman Sachs, the company was already a household name by the time former executive Greg Smith chose to voice his reservations about it so publicly in The New York Times today.

The paper presumably wouldn’t have opted to publish the OpEd had Goldman not been such a high profile - and yet super secretive - institution.

For all the press attention Goldman has gathered over the years, those on the outside still know relatively little about what goes on inside its gilded cage.

As such, Goldman may be a well-known name but it’s hardly a well-known company. This is how its executives famously like to keep things at Goldman - discrete. That was until Smith drafted his 1,271 word opus.

Goldman Sachs may be a bank but it’s hardly one that dabbles in the parochial world of retail banking.

Instead, Goldman is famous for a few things that only a few of us out there can relate to: Envious pay packets, brokering outrageously big deals and most of all, perhaps, demanding admissions and performance criteria which see the firm tout its expertise as the best money can buy.

The problem, Smith alleges, is that Goldman is now outsmarting its clients, to their detriment. "Integrity? It is eroding," he writes.

"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."

This is a view Goldman strenuously denies.

Writing in response, Goldman’s management said it was "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.

"In a company of our size, it is not shocking that some people could feel disgruntled. But that does not and should not represent our firm of more than 30,000 people."

Nevertheless it concedes "everyone is entitled to his or her opinion."

It’s hard to know who’s right without having spent time at Goldman first hand.

However it is likely some of Smith’s former colleagues at Goldman may have spent the first part of the day perusing his prose with a hefty degree of schadenfreude, and the second part assuring clients they haven’t been ripped off.

Smith, who worked for the bank for 12 years and most recently ran the firm’s U.S. derivatives business in Europe, Middle East and Africa, lays the blame squarely on Goldman’s current CEO Lloyd C. Blankfein (pictured above) and President Garry D. Cohn, who he says "lost hold of the firm’s culture on their watch."

Former Goldman employees tell me, however, that the culture began to change well before that. "The real change was 1992 to 2002. That was when things became different," says one former Goldman veteran.

"Now it’s like any other listed company. It has to make money."

In 1999, under the stewardship of Hank Paulson, former U.S. Treasury Secretary, and fallen financier Jon Corzine, Goldman moved to shed its 221-member partnership and became a publically traded entity.

The outcome: Shorter-term incentives for Goldman’s staff and shareholders and more pressure to produce "P&L," slang for making money.

Mind you, if Smith has been at Goldman for just 12 years he wouldn’t have been part of the Goldman generation that witnessed the firm’s golden era and cashed in big-time.

Still, Smith’s move serves as a reminder to Goldman that  it must sharpen its image and face up to the now-familiar criticisms levelled at the institution with increasing frequency.

It’s been two years since Matt Taibbi branded Goldman a "great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money," in Rolling Stone magazine and still it remains an icon of excess.

On Smith’s Facebook page friends and family applauded his "bravery" in his David and Goliath battle against what some see as the "leanest and meanest" of Wall Street’s stalwarts.

One friend couched it perfectly wishing Smith "Congratulations and/or condolences. I would expect nothing less from you."



soundoff (22 Responses)
  1. Michael Finn

    Starting? STARTING?

    These A$$h0les wreck the world wide economy, destroy countless pension funds and destroy national economies and their reputation is now just starting to go down?

    March 14, 2012 at 6:49 pm |
  2. AmyinCambridge

    Did they ever have a shine to lose?

    Surely you don't think they are singular in this behavior of deception, lies, cover-ups and schemes. But let's remember folks, good ol' Capitalism will "right itself". HA!

    March 14, 2012 at 7:31 pm |
  3. Tom Matlack

    I also was an employee of Goldman and then a client when I became CFO of The Providence Journal. My view is that Mr. Smith is part right. But my experiences were in fact quite different, from a power lunch with Robert Rubin to fire GS when they refused to allow us to talk to other bankers before a huge assignement.
    Here are my thoughts: http://bit.ly/yd2ShU

    March 14, 2012 at 7:45 pm |
  4. mangold

    who cares about noisy peasants as long as i m loaded

    March 14, 2012 at 8:21 pm |
  5. alumette

    It's about time. Losing their shine ? they should lose their asses.

    March 14, 2012 at 9:04 pm |
  6. siegfried

    how sad for him ! I hope he'll get a big bonus for quitting...

    March 14, 2012 at 9:10 pm |
  7. Rick

    Goldman Sachs is one of the main 3 banks that comprise the backbone of the Federal Reserve. Its not going anywhere. It owns our money, it owns our country. This is just a speedbump to them.

    March 14, 2012 at 9:44 pm |
  8. GuessWho

    Is the Op-Ed not only confirming what Goldman was accused of at congressional hearings? Have Goldman not already long lost their shine!?

    Strange take from the author here on CNN. The Op-Ed was not a revelation but rather a further confirmation of what we already know.

    March 14, 2012 at 9:45 pm |
  9. getoutofdebtfree.org

    They are falling apart hahahahahaha even there own now they are DOOOOMED

    March 14, 2012 at 10:00 pm |
  10. ProperVillain

    Wait, you mean a bunch of bankers that almost crashed the world economy are corrupt and greedy?! Calling this a revelation is like saying the outcome of "Lost" is the biggest television shocker of 2012...

    March 14, 2012 at 10:08 pm |
  11. lookingin

    get an idea of the mentality GS has...

    http://twitter.com/#!/gselevator

    even if it is a joke its eye opening....

    March 14, 2012 at 10:48 pm |
  12. yuck

    good that people leave bad companies.

    March 14, 2012 at 11:02 pm |
  13. Artofwar

    ... It is refreshing to hear-someone at the top- telling the middle- what they should have already known...Artofwar

    March 14, 2012 at 11:34 pm |
  14. Floyd Burgoz

    Crooks.

    March 14, 2012 at 11:59 pm |
  15. Leon

    JP Morgan > Goldman Sachs

    March 15, 2012 at 3:07 am |
  16. Paul Johnston, PhD Economics

    What a FRAUD and FARCE the Goldman Sachs, the EU and Greece are playing. The was Sachs, the EU and Greek politicians who created the financial mess & ALL went "unpunished" without anyone being found guilty of theft and incredible crimes and misdeeds!
    Nothing will change in the EU and Greece’s corrupt politicians & Sachs will do the same thing all over again, stealing EU and Greek citizen’s money, with no one ever held accountable or responsible.
    ***Just Pathetic! - All this after $200 Billion in Greek & Sachs money was moved secret Swiss Banks recently!

    March 15, 2012 at 6:50 am |
  17. JOE

    How sad that Greg Smith said, is the truth, and most of his peers know but won't back him up. Most of his peers have families they have to support and insure from catastropies so they will never speak out because they know what the consequense will be. Greg Smith has already been pegged as a discgrunted employee along with all other employees who have brought up issues like this at different levels. The Golden Sachs of the world have always been protected by the best lawyers and our political forces. My best to Greg Smith for coming forward.

    March 15, 2012 at 2:52 pm |
  18. Alex Povolotski

    Goldman are sharks and only sharks survive in this cut throat Wall St. environment. So nothing wrong with Goldman though it Sucks :-)

    March 15, 2012 at 3:56 pm |
  19. gahh

    To Big To Fail, just ask GW Bush. The problem is, Bush didn't use his money to rescue GS, he used our tax dollars. Then our tax dollars was used, to give CEO'S millions of dollars in bonuses. But Bush got his money, when these same people gave a million dollars a day for 100 days, for his library. It's enough to make you sick! I hope they go so far under, they run into Satan himself.

    March 16, 2012 at 11:31 pm |
  20. HoldYourHour

    "Envious pay packets"?
    "Publically"?

    Nina, get an editor. You may have to look outside CNN, though.

    March 18, 2012 at 1:55 pm |
  21. réputation web

    I've learn some excellent stuff here. Definitely worth bookmarking for revisiting. I wonder how so much effort you put to create the sort of magnificent informative web site.

    May 17, 2012 at 10:13 am |

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