A disgruntled outgoing employee of Goldman Sachs has labelled the environment at the investment bank “as toxic and destructive as I have ever seen it”, in an opinion piece for the New York Times.
Greg Smith was until yesterday an executive director and head of the firm's United States equity derivatives business in Europe, the Middle East and Africa. He worked for Goldman Sachs for almost twelve years and said he is leaving because clients' interests are being “sidelined” in the way the company pursues profits.
Smith claimed Goldman Sachs employees are more likely to be promoted for making money than for understanding client needs. Practices such as persuading clients to buy assets the bank does not want and encouraging clients to trade instruments that yield high profits to Goldman Sachs are the ones that get rewarded, he said.
“It makes me ill how callously people talk about ripping their clients off,” wrote Smith. “Over the last twelve months I have seen five different managing directors refer to their own clients as 'muppets,' sometimes over internal email.”
Smith said he views the culture at the firm as unhelpful and ultimately self-defeating because it risks losing clients' trust in the business.
“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.”
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