Ex-Goldman Exec Comes Clean On How A "Toxic And Destructive" Goldman "Rips Its Clients Off"

Tyler Durden's picture

Stop us when this confession from Greg Smith, a now former executive director and head of the Goldman's United States equity derivatives business in Europe, the Middle East and Africa, sounds exactly like everything we have said about the firm over the past 3+ years (and why we just can't wait for the next trading "recommendation" from Tom Stolper).

Excerpts from the NYT. Highlights ours.

Why I Am Leaving Goldman Sachs

Today is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.


I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.

When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.


How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

What are three quick ways to become a leader? 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.

Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.



And so on - the picture is more or less clear to anyone who has read our endless rants against the tentacular financial monopolist of scale. Also, maybe it is time for all those media "critics" to offer an apology to Matt Taibbi?

While this comes nowehere close to redeeming the massive ills the firms and its peers have inflicted upon society, this kind of self-reflection is critical, not only at Goldman, but everywhere else, if the world has some chance of stopping before it slides right over the edge.

We leave readers with some appropriate sketches on this now closed matter courtesy of the inhouse artistic genius, William Banzai.

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AN0NYM0US's picture

"resigning or retiring" the words Disingenuous Asshole comes to mind as I read this, unless of course he will be returning some of the tens of millions he has reaped from the bonus pool (clients)

GetZeeGold's picture



They might rip everyone off.....but they do dress nicely. You have to give them that.


Chris Jusset's picture

"Toxic and destructive" is precisely the correct phrase to describe Goldman.

Debt-Is-Not-Money's picture

You can't trust anyone that doesn't eat pork!

Leopold B. Scotch's picture

This screwing began day one when certain firms were granted the right to legally counterfeit via the fractional reserve printing system backed by the Federal Reserve master printer.  Loan all dollars into existence and make 'em all your slaves.

Goldman may be particularly rotten these days, but let's not lick the hand of any debt master who does so with such secretive and ugly methods.  This has been a screwing of the people day one since the days of Jekyll Island.

Also, Goldman clients may be blind and stupid, but they at least are duping themselves.  I don't weep for them too much.

The same should be said for UST holders.  You buy an investment that pays you back with your own tax payments and/or in depreciated dollars?  Be my guest.

Vampyroteuthis infernalis's picture

The world is a vampire..........  squid! I just left a place that was similar to what this former squid author stated. The money was significantly less, but the toxic environment persisted. Once places go to shit there is no going back. Morons ruin the organization from the top down.

Being in an executive chair, this little apology means nothing since it originated with you.

narapoiddyslexia's picture

This means Dudley has to leave the NY Fed. After all, The Dudster was a partner and managing director at Goldman, Sachs & Company and served as the firm's chief U.S. economist for a decade. 

The Dudster must resign! He is toxic and destructive!

Bananamerican's picture

"I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it."

"Heaven, I need a Hug"


I'm just bein' real, you know
I'm like the sun, I'm tryin' to shine on everybody
You know what I'm sayin'
But it's like situation after situation, you know
So I write about it to get it off my chest, you heard

See, I get lost sometimes, don't understand this place
Look in the mirror sometimes and see a troubled face
And then my tears roll down and hit the sink
Then I hold my head up high, I hope the Man upstairs can hear my cry

I'm always tryin' to help people out
And it's them same people tryin' to take food out my mouth

(Fo' real tho') It seems like the more money I make
(Fo' real tho') The more drama y'all try to create
(Fo' real tho') And through I try to move into the positive
(Fo' real tho') The more y'all don't wanna let me live

When will you realize that I don't owe you nothin'
Need to get up off your butt and go get your own somethin'
I'm pullin' on my hair to keep from snappin' off
Fools ride up in my camp and be actin' off
Somebody out there please pray what I'm talkin' 'bout
Still young tryin' to figure it out

Heaven, I need a hug
Is there anybody out there willin' to embrace a thug
Feelin' like a change of heart
And all I really need is a sign or a word from God
So shower down on me, wet me with your love (or urine, your call)
I need you to take me and lift me up, oh, yeah

DaveyJones's picture

How exactly does an ex-Goldman come clean?  Amicin? Garamycin?

DaveyJones's picture

They were already using that word but kept misspelling it

redpill's picture

Did it never occur to this guy that Goldman was like this all along, and young naive kids out of Stanford with dreams of being "the man" simply willed themselves not to see it, and it took 10 years for the rot to finally become undeniable? 

Taking the most optimistic view of humanity would mean that this squiddy had some tiny thread of morality left in his contorted soul and decided to "come clean."  More likely this is a Machiavellian play to protect his own ass so he doesn't wind up dead in a hottub. He probably crossed the head vamp squid himself, and figured this sort of public tirade would serve as a reason not to suddenly suffer "death from natural causes" while walking in his neighborhood since that would look just a liiiiittle too coincidental for squiddy comfort.

Even so, vampire squids have notoriously long memories.  If I were this fellow I'd be careful which private jet I chartered for my annual vacation to St. Barts.

eatthebanksters's picture

There was a time when the Goldman Sachs brand was synonomous with inegrity...It was years ago when a guy named Whitehead was at the helm.  There is a story about a time where Goldman clients lost $60 million on a bad deal (Goldman was only worth $30 million at the time) and Whitehead and the rest of the GS group made the clients whole, even though it took time.  Clients come back to do business with advisors like that.  Blankfein was the top of his class at Harvard law school and intellectually he can rationalize any despicable behavior...just like he has done if front of Congress. Nowadays GS is synonomous with organized crime because thats what they appear to do; run a criminal racket.  When you have the political clout to change laws that in the past protected the client and now allows you to legally steal from them, then things have gone to far.  I doubt their world will change much. in a world driven by resuts they have the scale and wealth to buy the info they need to be an effective market maker.  With zillions of Bernanke's dolars floating around and few options with regards to firms wise the size and scale to invest, the corrupt machine of GS will thrive in this environment. If I were a fund manager I would use the likes of Morgan Stanley, BlackRock or Schwab...the leadership of those firms recognizes that the customer is the focus of their service.  Fuck the likes of GS and JPM and the dirtbags that rn them.

Debt-Is-Not-Money's picture


"Even so, vampire squids have notoriously long memories."

No Shit!

Thinking back to 2008 the first one to go down was Bear Stearns. Bear was the only one that failed to "heed the call" in the bail-out of LTCM a decade earlier.

trav7777's picture

I am thinking I should have stayed with MS in the early 90s instead of going to law school...then I could have ripped everyone off too.  Oh wait, law, lol...win/win for me!!

Leopold B. Scotch's picture

Hard to believe lawyers are finding themselves playing second-fiddle to a bigger parasite class ala Goldman.

Lawyers and bankers, though.. hated for good reason, even if there are a few good ones among them.

narapoiddyslexia's picture

My theory - lawyers are becoming better people all the time, as the financial sector sucks more and more of the available money out of the corporate sector, there is less and less left for lawyers. As lawyers make less and less money, the vultures leave the legal profession or don't go into it to start with, and thus the average morality of the legal profession improves. Thus, thanks to Goldman Sachs and its ilk, lawyers become better people, as a class.

Gold Dog's picture

Lawyers...it's the same old story, 98% of them ruining it for the rest of them!

Debt-Is-Not-Money's picture


If you add-up both of them they are still killing the host (us) we are still screwed, and that's the only screw missing from the chart.

MeelionDollerBogus's picture

Ya, there ought to be a bankster/lawyer forex-style trading vehicle.

You know when lawyers are considered the good end of the trade ... WE'RE FUCKED

Pseudo Anonym's picture

shocking that I was first to give you a tic up. I thought there would've been tons of that on this site.  Whether you said it with or w/o sarc, I remembered where I was, where I am and what and how I did it.  But I guess you had to be there ...

William113's picture

I hate you but that was funny.

markmotive's picture

Wolves in sheep's clothing.....this is nothing new for the banking industry. This guy's experience is probably an anomoly.


Geralde Celente on the global banking kleptocracy:


cranky-old-geezer's picture



99% of Americans have the same vulture mentality as GS.   They would abandon every principle they have to make a buck.

Money is their god, just like GS, no difference.

It's not just GS.  It's not just the financial industry.  It's not just our corrupt leaders.

It's 99% of Americans too, corrupt to the core.

That's why America isn't worth saving, and won't be saved.

Rudolf Havenstein's picture

Jews ripping off goyim........Shocking!

Hugh_Jorgan's picture

Take that crap elsewhere, won't you? A greedy dirtbag is a greedy dirtbag, plain and simple. Bigotry is less than helpful when it is directed at Blacks, Jews, White Male Christians, Non-Jews or whoever. Here's an idea; instead of speaking in broad generalities, let's focus on the individual who IS responsible for their own flaws. Maybe you could start by analyzing and fixing yourself, that should keep you busy for awhile...

orangedrinkandchips's picture

I agree Hugh, if he has hate in his heart...let it out (white power!)....lol...from Chapelle show.

I am a jew and while i agree with racism, it's under one condition: that everyone is offended! it's not funny til everyone is offended.

I do have to say these guys- humans really-  above being jewish, dyslexic, ugly, greedy, vegan etc. are evil and they do give jews a bad name. I cant help but think people like the top ranks at GS were responsible for ww2. Sad, but true. 

It sucks...but your right....a dirt bag is just that....no matter what else...dirt bag is a trump card

Yardfarmer's picture

it's OK, the goy donkeys can bray all they want. they are unintelligent beasts needing bridle and bit. http://www.thepeoplesvoice.org/TPV3/Voices.php/2010/10/18/major-rabbi-sa...

MeelionDollerBogus's picture

Honestly, I'll admit some Jews are ripping off some non-Jews. But I can't honestly say that's the real big picture. Look at the central bank players from Russia, China, Japan.... Jews? You think so? I don't think so. And look at other kinds of manipulation. Look at how Japan is going to revise the safe-limit exposure of radiation so that no evacuations are mandatory. How's that for manipulation? Cost you more than a retirement fund, that's for sure. Again, not Jews vs Goyim there & that's literally life & death. Just saying, some perspective is worth keeping.

brooklynlou's picture

So did the Nazi's. The SS rounded up all the best tailors is Europe

Dermasolarapaterraphatrima's picture

"Clients" don't get ripped off. It's more likely the clients of funds that use GS who get the ultimate shaft. The funds that use GS get fat commissions like brokers anywehre. This is one reason Bogle (from Vanguard) says to bypass most funds and buy the ETFs or the commodity itself or, as an alternative, a low cost fund.


After this artilce and MF Global (and its clone) and advice from Bogle you think people might wise up?

Ponzi Unit's picture

Irrelevant, Anonymous. This is a bombshell of a story. GS insider reveals true culture. Your observation is sophomoric.

AN0NYM0US's picture

Well said Ponz, I have a bridge you might be interested in purchasing

nope-1004's picture

Is Stolper recommending bridges now?  Leave your cubicle and go ask.......

UP Forester's picture

I think he had a "buy" call on the I-35 bridge, and his daddy had a "buy" call on the Tacoma Narrows....

Terminus C's picture

This is a Goldman PR piece.  It says the following in support of Goldman:

-The firm is critical to the survival of global finance

-for 134 years Goldman has been about helping its clients

-there was a culture of teamwork and humanity


The only thing it says is bad about Goldman is that it has a few bad apples (Lloyd and co.)

Essentially the message is: The system is good, if we'd just drop a few bad apples

Now they will "fight" (Goldman's response) which will distract the public from the real systemic issues and have them (the public) focus on a trivial catfight that makes great headlines.

As propaganda goes it is well done, otherwise, it is pure bullshit.

blindfaith's picture



If 'we are doing Gods work' didn't piss off the uber rightwing super rich clients, then everyone got what they deserved.  What god was the question no one asked.

So the guy has 20/20 hindsight.  Then how come Consumer Reports in August 2005 warned about all this and told it's readers to stay clear.

All this'gee,I didn't see it' is pure 'defendable in court' bullshit.

Leopold B. Scotch's picture

Consumer Reports?  Christ.  Maybe, but people have plainly warned about this rigged bullshit from day one:

"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill."
-Charles A. Lindbergh, Sr. , 1913

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
-Henry Ford

"The Federal Reserve banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this nation is run by the International bankers."
-Congressman Louis T. McFadden

Without the Fed, Goldmand and all these other shysters TBTF would be rendered mere mortals. Instead, they vacuum up all the nations wealth and economic seed-corn, raping the nation of it's economic viability. Yes - VAMPIRE SQUIDS! Goldman may be the best, but they're all the same.

DaveyJones's picture

your posts are something else this morning.

GetZeeGold's picture



That almost makes sense.......so basically GS is just sticking up the the little guy.


GS is.......dare I say it.........AWESOME!!!!!!

Justawhoaman's picture

You are an idiot if you think there are political sides in this. The pukes are all on the same side, THEIR SIDE (insider), and all the vitriol between conservatives and progressives is pure theatre.


kridkrid's picture

Fantastic observations.  That is just as valid as any other interpretation.  Even if the piece is actually sincerely written, this is how it will be spun.