Was vampire squid on the menu for Cameron?
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Friday 16 March 2012
It had all been going so well until he sat down for lunch. On the final day of an otherwise successful US tour, the Prime Minister fell victim to some unfortunate timing yesterday when he found himself dining with Lloyd Blankfein, the controversial boss of Goldman Sachs, just 24 hours after one of the bank's senior directors denounced his employer as "toxic" and "destructive" in a public resignation letter.
Greg Smith's letter remained the talk of Wall Street as David Cameron lunched with Mr Blankfein – the head of the bank known as the "vampire squid" – along with a coterie of billionaire bankers and hedge fund managers at the New York Stock Exchange.
Unsurprisingly, no photographers found their names on the guestlist of one of the most problematic events Mr Cameron's media advisors have had to deal with during his time as Prime Minister.
Others who were in attendance, however, included George Soros, famed as "the Man Who Broke the Bank of England", along with the CEOs of Morgan Stanley, BlackRock and BlackStone.
With topics for discussion understood to include the need to dilute regulation obstructing the flow of finance between Britain and the US, it was never going to be much of a social occasion.
But even as Goldman Sachs continued its efforts to douse the fires of a global image crisis, Mr Blank- fein's rivals were battling to stifle any temptation to make capital out of their competitor's discomfort.
Jamie Dimon, chief executive of JPMorgan Chase, circulated a memo warning staff to make no reference to Greg Smith's sensational letter, which was published in Wednesday's New York Times, however tempting it may be to use it to woo clients away from Goldman.
The letter "is generating a lot of discussion around the street," Mr Dimon wrote. "I want to be clear that I don't want anyone here to seek advantage from a competitor's alleged issues or hearsay – ever.
It's not the way we do business. We respect our competitors, and our focus should be on doing the best we can to continually strengthen our own standards."
Mr Smith spent 12 years at Goldman, where he was in charge of trading US equity derivatives from the bank's London office and one of a cadre of executives drafted to mentor new recruits.
He described collapsing moral standards at the bank, alleging that young traders referred to clients as "muppets" and delighted in "ripping their face off" – that is, making very large profits out of them.
With the incident knocking more than $2bn off the value of the company, Goldman characterised Mr Smith as "disgruntled", saying he was one among 12,000 vice-president-level employees and that his views did not reflect the reality of the firm.
Goldman shares yesterday recovered some of their losses, and were trading up 2.4 per cent at lunchtime in New York.
Who was at the lunch? The 'great and good'... and the controversial
Job Chairman and CEO of Goldman Sachs
Pay deal $14.1m (2010 figure)
Job Chairman of Soros Fund Management
Income $3.3bn (estimated, 2010)
Job President and CEO of Morgan Stanley
Pay deal $15.2m (2010)
Job Chairman and CEO of BlackRock
Pay deal $15.9m (2009)
Job Chairman and CEO of Blackstone
Pay deal $4.96m (2011)
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