On Monday morning, former Goldman Sachs $GS employee Greg Smith will publish his detailed account of life at one of the world’s largest investment banks in a book titled: Why I Left Goldman Sachs: A Wall Street Story
The memoir is likely to be based on his op-ed for the New York Times entitled, “Why I Am Leaving Goldman Sachs” back in March of this year.
Here’s a small taste of the damning resignation letter that may have shocked the public but no big deal for wall-street.
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.
Most headline catching part of the letter was how he described his Goldman colleagues making reference to clients as MUPPETS:
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. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding.
You can read the full resignation letter on NY Times site.
So as you can imagine the book is to be full of juicy tales of his life at Goldman without any mention of the fact he was demanding a promotion with a salary of $1 million before he decided to quit. Or the fact he spent twelve years in such a corporate culture before he had a conscious awakening. I won’t be rushing out to buy this book.
Investment banks were a great institutions when they were private partner owned organizations. When the collective capital of the partners was at risk rather then the publics, and when decisions were made with three to five year time horizons rather than quarterly performance measures.
Times may change, organizational structures may change, but values of trust and integrity should never.