The Blast on Goldman



The hottest talk on the Street lately is unsurprisingly the blast that Greg Smith, the London-based executive, released through an op-ed column of the New York Times upon his departing Goldman Sachs. With an explicit title, “Why I Am Leaving Goldman Sachs,” Smith shines light onto his 12-year experience with the firm to debunk the crooked morals of the famous investment bank. In the article, Smith laments the leeching nature that Goldman has developed over several years, as current business is primarily conducted to make money. With meetings that discuss mainly the amount of money earned off of clients, or “muppets,” as managing directors sometimes call them, Goldman Sachs has exhibited a profit-driven aspect sometimes at the expense of client needs. Such loss of Goldman’s original culture – the spirit of achievement, humility, diligence – is what is driving Smith to leave the firm. The article made quite an impact; not long after its release, the article caused the firm to lose $2.2 billion for shareholders. Different reactions have sprung across the nation: derailing against Wall Street, doubt against Smith, and even a parody titled, “Why I am leaving the Empire, by Darth Vader.”

I personally believe that it was unprofessional and rather daring of Smith to have released information about his former workplace. Even if he found it crucial to announce to the public, revealing internal information is not the most venerable deed. Nonetheless, it definitely served as a wake up call for those banks that have been prioritizing generating profit over meeting client interest. Although a large number of people seemed to have been surprised by the sudden article, I however found it rather obvious. Being around a wealth of information regarding the finance industry, I was given the opportunity to understand some aspects of the working environment of investment banking. Over some time, the equation of banking equals money was slowly established in my mind. Of course, not all firms operate in the way this article describes -- we need to cast doubt upon the information provided in the article. There are firms that provide great quality service to clients, but it does raise the question of profit versus ethics, the question of how that equation was slowly embedded in my mind. Goldman as well as Wall Street can now take a quick moment to reflect its operations and perhaps veer towards what first caught young Smith’s attraction.

Chris Kim