Goldman Sachs ‘sidelines client interest’, says resignation letter

Goldman Sachs has an environment “as toxic and destructive as I have ever seen it”, according to Greg Smith, former head of the bank’s US equity derivatives business for EMEA,
who has published his resignation letter in the New York Times.

“I truly believe that [the] decline in the firm’s moral fibre represents the single most serious threat to its long-run survival,” Smith wrote.

He joined the US bank almost 12 years ago, and claimed in an opinion column for the New York Times yesterday: “The interests of the client continue to be sidelined in the way the firm operates and thinks about making money.”

A spokesperson from Goldman Sachs said the bank disagreed: “We will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”

However, Smith wrote the firm “has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for”.

He added that the bank has stood for a culture revolving around “teamwork, integrity, a spirit of humility, and always doing right by our clients. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization.

“I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.”

The turning point came for Smith, who was involved in recruiting university students to Goldman, when “I realized I could no longer look students in the eye and tell them what a great place this was to work”.

His words will be of concern to Goldman Sachs, not least because Smith says he has advised “two of the largest hedge funds on the planet, five of the largest asset managers in the US, and three of the most prominent sovereign wealth funds in the Middle East and Asia [and] clients [with] a total asset base of more than a trillion dollars.



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