Greg Smith, the former Goldman Sachs vice president who told the world he was quitting with a New York Times Op-Ed in March, released "Why I Left," his tell-all book on the investment firm, Monday.
The book, "Why I left Goldman Sachs: A Wall Street Story," promised to elaborate on his essay, which decried Goldman for deceiving clients in order to earn the firm as much money as possible, even when it meant betting against a client's interest.
“I knew in my heart there was simply something deeply wrong with the way people were behaving, in the way they didn’t care about the repercussions, in the way they saw their clients as adversaries,” Smith wrote in his book, according to a New York Times preview. Speaking to "60 Minutes" on Sunday night, the 33-year-old former equity derivatives salesman said that naive clients were considered a "golden prize": “[The] quickest way to make money on Wall Street," he said, "is to take the most sophisticated product and try to sell it to the least sophisticated client.”
Early reviews note that Smith's book offers a little new insight into Goldman's corporate culture and the desecration of a "put the client first" ethos. SEC settlements, civil suits and government inquiries into the financial crisis have already revealed as much. Indeed, much of the testimony heard by Congress' Financial Crisis Inquiry Commission in 2010 focused on the culture shift in the financial sector -- including at Goldman -- which in recent decades put profits above responsibility and client care. Goldman still boasts the largest SEC penalty ever paid by a Wall Street bank for its $550 million settlement over accusations that the firm sold investments that it believed would fail.
Smith reportedly offers some mildly colorful detail: London traders dubbed unsophisticated clients "muppets"; there was a bachelor party with a topless girl; Smith alleges he saw CEO Lloyd Blankfein naked. But is this any more illustrative of Wall Street culture than the JPMorgan internal emails, which described selling clients "sack of shit" securities?
Bloomberg Businessweek wrote of "Why I left Goldman Sachs" that Smith himself comes off poorly in his own book. "He does not seem to be aware, most importantly, of how awesome he thinks he is ... Smith’s lack of perspective about his own abilities may have carried over into his judgment about an institution whose purpose is to profit on financial transactions," noted Bloomberg's Bryant Urstadt.
Urstadt's point carries through to Smith's promotional interviews, in which he expresses disappointment that Goldman did not respond to his criticism more positively. (The firm stated it investigated and found "no evidence" to support Smith's claims.) "The thing that disappoints me most is that management is denying there's a problem. Why not try to repair the trust instead? Clients are telling you they don't trust you. There's been an SEC fraud suit that was settled for half a billion dollars" Smith told the AP on Monday.
Smith may have read the book -- and written his own -- all wrong: The former banker insists that he "loves" Goldman and wants the firm to return to some golden era of client care. But such a Wall Street doesn't exist; the fallout since 2008 has taught us that, at least. As such, Smith's rose-tinted disappointment strikes Wall Street critics as naive at best (or perhaps muppet-like, to borrow from London trader parlance). As Urstadt put it, "Smith came up one too many times against the reality of the business — you really are what you earn, and the client will never trump that — he was heartbroken. So he wrote the financial world’s most well-read breakup note."
Watch Smith's "60 Minutes" appearance below:
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