Greg Smith, the departing banker who declared that Goldman Sachs suffered from a "toxic" habit of ripping off its clients, won support from an unlikely source last night: the great-grandson of the Wall Street firm's founder.
Henry Goldman III, whose great-grandfather Marcus Goldman founded the company as a modest bond trading house 143 years ago, said Mr Smith's firecracker of a resignation letter was "spot on" and that the investment bank had changed "for the worse" in recent decades.
"I thought the article was a reflection of Wall Street in general and 'let buyer beware'," Mr Goldman told the financial news website Business Insider. Now semi-retired and living in Colorado, he said he had watched Wall Street's ethics deteriorating and that the predatory behaviour of bankers was "something friends of mine have discussed ad infinitum".
There was also criticism from one of Goldman's big clients in Europe. A spokesman for APG, a Dutch investment adviser which handles €300bn (£250bn) of assets, said: "We would have expected that a company that faces such a big media backlash over something so core to their business such as client trust would have instantly reached out to those clients to say something."
Goldman says it does not recognise Mr Smith's characterisation of its culture and dismissed him as a "disgruntled" and relatively junior employee. Nonetheless, it did hint yesterday that it would give clients more information relating to its own investments and relationships, so that they could better police potential conflicts of interest. That move has been prompted as much by a critical court ruling in the US as by Mr Smith's rise to fame.
Meanwhile, the Wall Street establishment, including rival investment banks, rallied around Goldman.
New York Mayor Michael Bloomberg, the billionaire founder of the Bloomberg financial information business, declared his personal support. "The company is a vital part of the city's economy, and the kind of unfair attacks that we're seeing can eventually hurt all New Yorkers," a spokesman for Mr Bloomberg said.Reuse content