Chief Executive Lloyd Blankfein disputed the letter's assertions. Goldman answers disgruntled exec

Goldman Sachs on Wednesday pushed back against a New York Times op-ed written by a former employee of the firm who said he quit because the culture of the investment bank had become toxic and focused on profits rather than serving clients.

Goldman Chief Executive Lloyd Blankfein and President Gary Cohn wrote in an internal memo obtained by POLITICO that they were “disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients.”


In his op-ed, Greg Smith, who worked at Goldman for nearly 12 years, said the bank — famously castigated in Rolling Stone as a rapacious “vampire squid” — had lost its way and no longer put serving clients first.

“What are three quick ways to become a leader?” Smith, the former executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa, wrote in an op-ed that startled Wall Street. “a) Execute on the firm’s ‘axes,’ which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) ‘Hunt Elephants.’ In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.”

Smith also wrote that Goldman executives routinely refer to clients as “muppets” that exist solely to produce profit for the bank.

Blankfein and Cohn took issue with Smith’s assertions: “In a company of our size, it is not shocking that some people could feel disgruntled. But that does not and should not represent our firm of more than 30,000 people. … While I expect you find the words you read today foreign from your own day-to-day experiences, we wanted to remind you what we, as a firm – individually and collectively – think about Goldman Sachs and our client-driven culture.

“Anyone who feels otherwise has available to him or her a mechanism for anonymously expressing their concerns. We are not aware that the writer of the opinion piece expressed misgivings through this avenue, however, if an individual expresses issues, we examine them carefully and we will be doing so in this case.”

Goldman has been worked hard to restore an image tarnished by its role in packaging mortgage-backed securities that played a role in the financial crisis and subsequent recession.

The bank paid a record $550 million settlement to the Securities and Exchange Commission over allegations that misled investors in mortgage security. The bank recently hired Jake Siewert, former counselor to Treasury Secretary Timothy Geithner, to lead its global corporate communications operation. He replaced Lucas Van Praag who led the bank’s initial response to the financial crisis.