When Greg Smith, the "disenchanted" and "jilted lover" of his employer, Goldman Sachs, planned his resignation, it seemed to me that there was nothing emotional about it. His resignation was a purposeful and vengeful act designed to create the most direct and collateral damage possible to Goldman Sachs. Op-eds are not spontaneously written and posted in the New York Times.
This was a pre-meditated act to try and damage the reputation of GS while uplifting his own image in the court of public opinion. (Don't forget about his eventual book deal!) He didn't wake up that morning and decide to write that piece. He'd been planning and strategizing his exit to create the biggest bang for himself and the largest thud for the firm. All the while, he has continued claiming that he chose the op-ed route to "force" the firm to change.
Sorry, Greg, but I don't think it turned out as planned. And the book deal (which you probably at least explored prior to your op-ed) turned south as most readers found it to be of little "titillation" and lacking in specific examples of his sweeping claims about how Goldman Sachs had "changed" during his tenure. The op-ed was your 15 minutes of fame; it's finished now.
If you wanted to draw attention to the notion of "fiduciary," "suitability" and conflicted deals, this story would not be a Goldman Sachs story but a wirehouse/Wall St. story. A solid, important, front page story which would have drawn attention to a current conversation happening in many Wall St. boardrooms. But to me, Greg Smith's tale sounded like a bitter, corporate guy who felt undervalued by his organization. Instead of presenting his own unbiased case about conflicted revenue models and deals on Wall St., he instead sounded like a spoiled child who did not get his way. It seems that when Goldman refused to meet his "new" salary demands and responsibilities, Smith retaliated by "telling on them (Goldman Sachs)." The problem for Greg was that everyone already knew whatever he had to say. And junior high is long ago.
Large wirehouse banks are sometimes conflicted in many of their transactions. They may earn "fees" as clients "enter" or "exit" investments without regard to how the investment performed. In other words, it's likely and possible that the broker has "earned" money while the "client" has lost money. Layer in hidden fees as giant revenue generators, intentional or unintentional opaqueness of the actual investment strategy algorithm, pile on top categories like "structured products" (derivatives) so complicated that the advisors cannot accurately understand how they work, let alone the end investor. Therein, lies the story.
Had Greg Smith stuck to the story of large banks and their outdated, revenue models which are sometimes conflicted, he probably would have rallied troops beyond his wildest expectations. But that was not his goal. Greg Smith wrote a mournful essay about his unrequited love for his longtime partner, Goldman Sachs, which read more like the tragic love story, Romeo and Juliet, instead of a tale about broken Wall St. Unlike the doomed Shakespearean love tale, which lasted approximately five days, Greg Smith's relationship with Goldman Sachs endured for almost 12 years.
Of note, prior to his internship and eventual employment with GS, Greg Smith was known in his native South Africa as being highly competitive. So, interning and then eventually landing a job with Goldman Sachs and achieving salary and bonus upwards of $500,000 certainly put Greg Smith in the top 1 percent. And there he stayed until Goldman refused to meet his salary and other related expectations.
Just like all long-term relationships, the qualities which first attracted Greg Smith to Goldman Sachs now seemed wrong instead of right. Who or what had changed: Greg Smith or Goldman Sachs? Does this column belong under the "Divorce" tab?
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