Greg Smith, the midlevel Goldman Sachs executive who famously left the bank the same day his resignation letter appeared as an explosive New York Times op-ed, told TODAY he quit because of the way the bank – and other Wall Street firms – dishonestly took advantage of uninformed clients. He has since written about his 12-year career at the firm in a tell-all book that details why left his London job as a derivatives trader and vice president.
Banks are supposed to make money, but “capitalism doesn’t need to come with unethical behavior,” Smith told TODAY’s Savannah Guthrie. He said he quit after reaching his limit of seeing Goldman Sachs take overcharging clients.
“When a teacher’s retirement fund in Virginia or Alabama is paying a bank an extra two million dollars, that affects people and I think it’s unacceptable,” he said.
Smith famously called the Goldman Sach’s work environment “toxic” in his op-ed column published in the spring and says that nothing changed after the financial meltdown.
“What I write about in the book is that since the crisis, none of these problems have been fixed,” Smith told Guthrie. “There are less banks, and they’re even bigger, so posing an even greater danger to society.”
In his book, “Why I Left Goldman Sachs,” Smith also writes about a culture fueled by alcohol. “Alcohol was a big part of the culture at the firm, as it is on Wall Street in general. Getting smashed with your clients was a regular occurrence.”
Goldman Sachs said in a statement that Smith writes about a firm “unrecognizable to us.” It also said it conducted an internal review and “found no evidence to support his claims,” only suggestions that Smith was frustrated with his career prospects.
The company said that Smith didn’t file any formal complaints internally, while Smith said he spoke to nine senior partners in the year leading up to his departure.
“We discussed ethics and culture. Behind closed doors, a lot of these people agreed with me but no one is willing to say it publicly,” he said. “The reason why I wrote the op-ed was to almost force change by saying something publicly that a lot of my colleagues agree with and acknowledge, and the idea of being asked to make morally dubious decisions by ripping off a charity or teacher’s retirement fund is something that bothers people so I actually wanted to try to change that.”
One particular charge by Smith was that his colleagues called their clients “muppets,” a slang term for “an idiot, a tool, manipulated by someone else.”
But an internal Goldman Sachs review found only one instance of the reference in employee email.
Smith insisted the term was used liberally, but said it’s more important to correct the issue behind it.
“I found the idea of searching for the word ‘muppet’ to be a bit of a hollow exercise,” he said. “I would have liked Goldman Sachs to actually address the issue. Are clients being ripped off? I think it’s pretty well known on Wall Street that getting an unsophisticated client to trade a very sophisticated product is a way to make money very quickly.”