Calling the environment he works in "toxic and destructive," an executive director of Goldman Sachs announced he's quitting the firm today because he can no longer stomach what his beloved company has become. And just to make sure he drives the point home to his bosses, his resignation letter is now on the Opinion Page of Wednesday's edition of The New York Times.
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Greg Smith, whose former job description is listed as "executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa," summed up his feelings rather succinctly in the opening paragraphs:
To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.
Smith goes on to place the blame squarely on CEO Lloyd Blankfein and president Gary Cohn, for letting firm's "moral fiber" deteriorate on their watch. Instead of "teamwork, integrity, a spirit of humility, and always doing right by our clients," he says that making money has become the driving force of all of Goldman's decisions (especially promotions), usually at the expense of the client's best interests.
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These complaints, of course, are the same charges that have been lobbed at Goldman for years, particularly since the economic meltdown in 2008. The accusations in the piece almost could have been written by Matt Taibbi himself. (Minus the caustic name calling, of course.) But to hear them now, from a former true believer — Smith started at the firm as intern 12 years ago, and has been there ever since graduating from Stanford — makes them particularly damning. Teaching the next generation of junior analysts that profit is all that matters ensures a future generation of executives who have known nothing else.
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Smith ultimately calls on Goldman to change its tune before all its clients figure out that they're getting ripped off and jump ship. A nice sentiment, but one that is hard to imagine playing out anytime soon. The fact that Smith would choose to leave rather than fight back suggests the patient is too far gone to save. Even worse, the fact that Goldman — despite a rough year of earnings and a public approval rating rivaling Congress — is still one of Wall Street's most powerful firms, suggests that the "Vampire Squid" really can't be killed.