A Goldman Sachs executive is taking a potentially damning parting shot at the firm. By resigning in a New York Times op-ed piece.
Greg Smith, of the firm's London office writes:
TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
Smith says Goldman has created a culture that cares more about making money than helping clients.
Smith oversaw equity derivatives and said employees were rewarded for "executing axes" — jargon for unloading unprofitable stocks and "hunting elephants," which is getting clients to trade whatever would bring the firm the greatest profits.
He writes that he hopes his article will raise questions for the firm.
I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.
Goldman Sachs issued a statement to the Times refuting Smith's claims.
"We disagree with the views expressed, which we don't think reflect the way we run our business. In our view, we will only be successful if our clients are successful... The fundamental truth lies at the heart of how we conduct ourselves."
- Sue Craig, reporter for the New York Times
This segment aired on March 14, 2012.
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