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They're disappointed with their banker, Goldman Sachs. But will they read Greg Smith's memoir, which hits bookstores today?
Back in March, Greg Smith really shook things up on Wall Street with his "See ya later!" walking-out-the-door New York Times op-ed about how Goldman Sachs has lost its way in the relentless quest for profits.
"Why I Left Goldman Sachs," the memoir for which Smith was paid a rumored $1.5 million to write, has now arrived in bookstores. Parts of it leaked out early, and there has a been a flurry of pre-publication punditry on what the book really means. Smith also went on "60 Minutes" Sunday to discuss all that has gone horribly wrong at Wall Street's most infamous investment bank.
Meanwhile, no shortage of Wall Street insiders and financial journalists of various stripes have begun to sift and parse Smith's motives, in some cases alledging that Smith was more con-man than crusader.
Frankly, it is more than a little shocking that Goldman — the "vampire squid" of Matt Taibbi's famous Rolling Stone article, the firm that survived the 2008 financial crisis while less well-connected banks like Bear Stearns and Lehman Brothers vanished beneath the waves — had not fallen in for this treatment before Smith came along. Is it really cool to call your clients "muppets," even if the Muppets are your clients?
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Goldman Sachs calls them "clients."
A bomb went off on Wall Street this morning when Greg Smith, a now former London-based executive for Goldman Sachs, published an op-ed in the New York Times saying that the firm has completely betrayed its responsibilities to its clients. 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."
It's the resignation email to end all resignation emails.
And just what Goldman needs! Another PR crisis, hot on the heels of yesterday's good, share-price-improving news that it had passed the latest round of Federal Reserve stress tests. As Smith puts it:
Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. 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.
It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.