Employee Tirade Leaves Goldman Sachs Poorer By $2.15 Billion

Greg Smith’s blog entry – “I can honestly say that the environment now is as toxic and destructive as I have ever seen it…the interests of the client continue to be sidelined in the way the firm operates and thinks about making money.”

Greg Smith, a former worker at Goldman Sachs, has sparked off a volley of outrage and indignation, with people calling it a “cowardly act,” and “a verbal volley that has sullied reputations.” Others are calling it “serious accusations from a credible person” that merit investigations and asking for “heads to roll if found correct.”

Smith said he hoped his tirade against the company “can be a wake-up call to the board of directors.”, “without clients you will not make money” and advised them to “make the client the focal point of your business again.”

Jaki Zehner, a former partner, who left the firm in 2002, has written in her blog that the directors must take the allegations seriously and must investigate the allegations by Smith with earnest intent.

“These are very serious accusations from a credible person in my view and I hope it does indeed provide a ‘wake-up’ call to the board of directors,” wrote Zehner. She had earlier said that she’s heard from “many people” in the past few years that the firm is emphasizing profits over character.

Chief Executive Officer Lloyd C. Blankfein and President Gary D. Cohn whom Smith blamed for fostering a “toxic and destructive” environment, replied saying, that they were disappointed by the contentions but said, “if an individual expresses issues, we examine them carefully and we will be doing so in this case.”

A Goldman Sachs spokesperson said: “We disagree with the views expressed, which we don’t think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”

A survey at the hospital revealed that most employees disagreed with what was alleged by Smith.

Janet Hanson, who had worked at Goldman Sachs for almost 14 years, felt that Smith’s article was uncalled for and said,”  By tossing a verbal hand grenade on his way out the door, he sullied the reputations of the vast majority of the people at the firm who work and live by the highest possible professional standards every single day.”

The blistering attack by the ex-employee saw its shares dropping by 3.4 percent, wiping off $2.15 billion of Goldman Sachs Group’s market value.

Was Smith’s tirade a moral decision to be commended, or is a malicious outburst of a disgruntled employee, upset on being denied a promotion, or increase in pay?