Goldman bent on milking clients, says outgoing exec

customers for a new one where clients are “muppets” and staff talk about “ripping their clients off”.
And he named chief executive Lloyd Blankfein, and president, Gary Cohn, as responsible for the change. They “lost hold of the firm’s culture on their watch”, Smith said in a Times opinion piece, published on his last day at work for Goldman.
“I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
“To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money,” he said.
“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.”
Smith said he had joined a very different Goldman nearly 12 years ago, one that had a culture centred on integrity and “always doing right by our clients”.
“The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years.”
Now the culture is all about raking in the bucks from clients and he sees “virtually no trace of the culture that made me love working for this firm for many years”.
Smith said he spent his career advising giant hedge funds and asset managers handling more than a trillion dollars on behalf of Goldman. His last position was executive director and head of Goldman’s equity derivatives business in Europe, the Middle East and Africa.
He had also spent time for the firm recruiting new talent for the firm, pitching its legendary culture.
However, “I knew it was time to leave when I realised I could no longer look students in the eye and tell them what a great place this was to work”.
He blamed a shift in how Goldman promoted people.
“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.
“It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.
“Without clients you will not make money. In fact, you will not exist.”
Goldman Sachs issued a rebuttal to Smith’s commentary, insisting it is focused on the client. “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. This fundamental truth lies at the heart of how we conduct ourselves.” — AFP.