Often-loathed investment bank Goldman Sachs is once again facing "devastating" criticism, this time from one of the firm's own executives, Greg Smith, who publicly quit his job Wednesday — via a New York Times column in which he branded Goldman as "toxic and dangerous." Smith alleges that Goldman doesn't care at all about its customers, and implores those remaining with the company to "weed out the morally bankrupt people" before the bank implodes. (Goldman refutes Smith's claims, saying they "don't reflect the way we run our business.") Here, five takeaways from Smith's "blistering" resignation and the resulting fallout:
1. Profits matter more than clients
"If you were an alien from Mars and sat in on one of these meetings," Smith writes, "you would believe that a client's success or progress was not part of the thought process at all." Instead, the company's sole focus is making money off clients, sometimes by conning them into investing in lousy products the company wants to get rid of. "It makes me ill how callously people talk about ripping their clients off." Smith is "saying publicly what others whisper privately," says Nelson D. Schwartz at The New York Times, "which is why his cri de coeur may be so provocative."
2. Goldman has a morally bankrupt culture
Smith says that when he started working at Goldman Sachs 12 years ago, the firm's culture revolved around "teamwork, integrity, a spirit of humility, and always doing right by our clients." Not anymore. The firm's moral decline got so bad that Smith says he "could no longer look students in the eye and tell them what a great place this was to work." This would be a "devastating indictment of any kind of business," says Frederick E. Allen at Forbes, but banks are built on trust and integrity, making the accusations all the more damning.
3. Clients are derided as "muppets"
In the past year, Smith alleges that no fewer than five Goldman directors have referred to clients as "muppets." This pretty much "confirms many of the worst opinions people had about the firm," says Noah Kristula-Green at The Daily Beast. But that's why these revelations shouldn't be shocking, says Halah Touryalai at Forbes. How many of these high-profile scandals must Goldman go through "before we stop expecting them to do otherwise?"
4. The only way to fix things is to fire Lloyd Blankfein
Clearly, the "decline in the film's moral fiber" is a direct reflection of Blankfein's leadership, Smith writes. The takeaway, says Allen, is that it's time for Blankfein to go. "Goldman Sachs must take drastic action to restore its reputation, and that action must start at the top."
5. Smith has a delightfully colorful backstory
Smith concludes his letter "with a real flourish," says Max Read at Gawker, recounting his life's proudest moments and how hard he's had to work to achieve them — an ethic that's non-existent at Goldman Sachs, which rewards "shortcuts." The most hilarious detail? "Winning a bronze medal for table tennis at the Maccabiah Games in Israel, known as the Jewish Olympics." Yes, not only is Smith a crusading former Goldman exec, he is a "ping pong star."