The employee, Greg Smith, was a mid-level executive who had been with Goldman for 12 years. In his public resignation, Smith said the culture at Goldman had deteriorated to a degree that he could no longer tolerate. Smith claimed Goldman is ever on the prowl for profits, regardless of whether or not the gains come at the expense of clients. He offered delicious details like GS traders referring to clients as "Muppets" by way of lending color to the firm's institutionalized contempt for outsiders.
The fall-out has to have exceeded Smith's wildest dreams. Paul Volker has chimed in, asserting it's the traders on Goldman prop desk corrupting the firm. Jamie Dimon, CEO of competitor JPMorgan (JPM) circulated a note telling workers not exploit the issue to steal Goldman's clients (which was tantamount to an invitation to Goldman's clients to take their business to the relatively classy JPM).
As Todd Schoenberger of LandColt says in the attached video, if Smith had resigned from anywhere other than Goldman no one would have said a word. The New York times wouldn't have printed the letter, either. Ripping Wall Street has become an American pastime.
Smith's editorial has been taken as gospel. His leak has been compared to a member of the Mob "flipping" on his family. Nothing Occupy Wall Street has done incited anywhere near the anger being directed at Goldman Sachs today. Still, the reality is we've learned nothing. Smith is a young guy who didn't like his job or the people for whom he worked. Goldman Sachs employs some of the most arrogant, capable, people on earth and fosters a culture of winning. If anyone there is nice it's a coincidence, not in any way a job requirement. All of which we knew.
Greg Smith is a patsy. From his perch in London, with a fancy-sounding title that means nothing, he wasn't supping with Lloyd Blankfien or plotting idiotic schemes with Jon Corzine. Smith offered no fresh insights about Goldman, save for the Muppet thing.
Smith will sign a book deal, join a table tennis league or simply disappear. Maybe some bank will hire him in a similar attempt to prove how much they care about clients. Regardless of where he goes the people outraged today will remain that way and those who defend Wall Street will sway no one.
In other words it'll be back to business as usual.
- Goldman Sachs