Scandal and headlines seem to perpetually follow Goldman Sachs (GS), a firm that's simply doing "God's Work
". On Wed. March 14, Goldman's name once again burnt up the Internet, and social media. This time it was from a resignation letter by one of its top executives published as an op-ed
at the New York Times.
The op-ed entitled "Why I Am Leaving Goldman Sachs
" blasting GS culture of greed was written by Gregg Smith, a Goldman Sachs executive director and head of the firm's United States equity derivatives business in Europe, the Middle East and Africa, according to the Times. The letter and its link has immediately gone insanely viral and trending worldwide. That was probably one factor that sank GS stock by 3.5% on the day while the broader market was essentially flat (see chart below).
You can hardly blame the enthusiasm of the 99% around the globe. After all, it's been over two years since Matt Tabbi at Rolling Stone turned "Vampire Squid" and "Goldman Sachs" into synonyms.
Here are some of the most revealing tidbit Smith wrote
"It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as "muppets," sometimes over internal e-mail."
According to Smith, the three quickest ways to climbing the corporate ladder at Goldman:
- Execute on Goldman's "axes," - Persuading your clients to invest in the stocks or other products that Goldman is trying to get rid of.
- Hunt Elephants." - Get your clients--some of whom are sophisticated, and some of whom aren't — to trade whatever will bring the biggest profit to Goldman.
- Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.
Of course, Goldman immediately came out with a three-sentence rebuttal:
"In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves."
There are some people questioning the motive and the exact position level of Smith.