'Why I Left Goldman Sachs': a viral op-ed expands into a memoir

Greg Smith, the former Goldman Sachs employee who carried out one of the most public resignations in history when he quit Goldman the same day The New York Times published his high-profile New York Times op-ed “Why I Am Leaving Goldman Sachs,” is back with another salvo, this time in the form of a tell-all memoir.

“Why I Left Goldman Sachs” describes Smith’s ascent from summer intern in 2000 to equity derivatives salesman in Goldman’s London office, the position he quit in March 2012. Along the way, the 277-page memoir paints a critical picture of Goldman, accusing it of “routinely deceiving clients and relentlessly pursuing profit at the expense of morality,” according to the AP.

But while Smith’s March op-ed struck a nerve and went viral, leaving Smith a hero in some readers’ eyes for taking a stand and revealing the corruption at Goldman, his follow-up book, at first glance, doesn’t appear to contain any groundbreaking news – or to be generating the same praise.

“Preliminary reviews of Greg Smith’s ‘Why I Left Goldman Sachs,’…have been lackluster,” writes Reuters. “Critics say the book contains few revelations, given that it had been hyped as a ‘tell all’ look at the investment bank.”

Echoes the Financial Times, “While the 277-page book, ‘Why I Left Goldman Sachs,’ paints an unflattering picture of Goldman in the years before and after the financial crisis, it does not contain any blockbuster discoveries that could lead to trouble for the bank’s top executives.”

In a Wall Street Journal review, Matt Levine, a former vice president in Goldman’s investment banking division, says the memoir lacks specifics and though it presents itself as an expose, “it is really a typical Wall Street memoir, in which the author wistfully recounts his youthful exploits and trading-floor antics before haranguing others not to follow in his footsteps.”

By all accounts, Smith was a “true believer” who posted Goldman’s 14 “Business Principles” to his wall and “bled GS blue.” He championed the firm’s spirit of teamwork, industriousness, humility, and putting the client first.

But as time went on, Smith became troubled by what he calls a change in the Goldman culture. Salespeople referred to clients as “muppets,” slang for “idiot,” and were concerned not with clients’ actual needs, but with making money for the firm, sometimes to the detriment of the clients. The culture, he says, became “toxic and destructive” and the bank began “ripping their clients off.”

“The wheel had turned,” Smith writes in his book about Goldman’s evolution following the financial crisis. “The banking world had become a trading world, and that was Lloyd Blankfein’s world. Goldman Sachs was becoming a hedge fund, and as part of the evolution, the bank was getting into new conflicts of interest. This new direction was a significant departure from what Goldman Sachs had become known for.”

For the record, Goldman has denied Smith’s allegations and said its investigations turned up no evidence of Smith’s allegations, including the use of ‘muppet’ in emails.

“The Goldman Sachs Mr. Smith describes is not one our employees would recognize,” a spokesman for the firm told Reuters Sunday. “Mr. Smith has asked for answers, yet he did not respond to our repeated attempts to contact him after his abrupt departure earlier this year.”

Smith, who was making $500,000 a year when he left Goldman and reportedly received $1.5 million for the book deal, has responded by saying he’s not trying to expose Goldman per se, but shine a spotlight on a deepening culture of greed on Wall Street and fuel a public conversation on how to fix it.

“I am in a rush to spread a message and get mainstream people to realize there is a big problem and to be outraged that no one fixed it,” Smith told Reuters. “There is a real absence of people within the financial industry trying to advocate for positive reform. I would like to try to be part of that conversation.”

Husna Haq is a Monitor correspondent.