Getting hired at Goldman Sachs [stock GS][/stock] is relatively easy if you’re not an ax murderer and can push opaque financial products without prickling your conscience, one former executive says.
Greg Smith, a former executive director at the investment bank and head of its U.S. equity derivatives business for Europe, the Middle East and Africa, resigned this week publishing what can be described as a resignation-editorial in the New York Times.
Smith says the investment firm has changed from its early roots, and he apparently wants to get a few things off his chest. Here’s just a snippet of his controversial editorial, which was published in the New York Times.
“I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave,” he wrote.
“How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.”
“What are three quick ways to become a leader? a) Execute on the firm’s axes, which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) Hunt Elephants. In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.”
Well, there you have it. One of the most public resignation letters from the street to date. Note to Mr. Smith’s future employer — he’s a solid editorial writer. And that can go either way.
kpanchuk@housingwire.com
