A letter by a Goldman Sachs executive blaming the company’s ‘toxic culture’ for his resignation has quickly spread around the world.
Five different managing directors referred to their own clients as ‘muppets’ as they offloaded them products they had no need for, according to Greg Smith, who was the head of Goldman’s United States equity derivatives business in Europe, the Middle East and Africa.
In a scathing parting letter published in the New York Times, Smith says:
“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,” the Rhodes Scholar says.
He said the culture at the company was as toxic and destructive as he had ever seen it.” Smith worked for the merchant bank for 12 years.
“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,” he says in the letter.
Goldman Sachs CEO Lloyd Blankfein is rated by Forbes magazine as the 43rd most powerful person in the world.
Billionaire US businessman Jim Clark told Forbes Smith’s criticism of Goldman was “what I experienced over four to five years”. “They will never make another dime at my expense,” Clark says.
Investment management firm founder Stephen Jarislowsky, who manages investments exceeding $US38 billion, is a strong supporter of Wall Street integrity.
“It’s about ethics and fiduciary responsibility, and the lack thereof,” Jarislowsky told Forbes. “If you’re a fiduciary you should work for your client and not for anyone else. If you’re a doctor, you’re not supposed to work for your pocketbook, but for your client’s health.
“A lot of people say The Lord’s Prayer: ‘Lead us not into temptation, but deliver us from evil.’ That should be over every desk on Wall Street.”