The market value of Goldman Sachs has dropped over $2 billion overnight and 12 year Goldman executive and hedge fund manager Greg Smith resigned publicly yesterday, causing a flood of opinion and uproar from the financial industry and investors.
“It makes me ill how callously people talk about ripping their clients off.” Smith wrote in his resignation letter, published in the NYT, “Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail…. No humility? I mean, come on. Integrity? It is eroding.”
The letter soon went viral, spreading across the internet, resulting in all kinds of commentary, from spoofs to support from all sides.
“I want to be clear that I don’t want anyone here to seek advantage from a competitor’s alleged issues or hearsay – ever,” JPMorgan chief executive Jamie Dimon wrote in a memo to employees, according to Reuters.
“It is unfortunate that an individual opinion about Goldman Sachs is amplified in a newspaper and speaks louder than the regular, detailed and intensive feedback [employees] have provided the firm.” Goldman Sachs’ founders Lloyd Blankfein and Gary Cohn, also responded, ”We are far from perfect, but where the firm has seen a problem, we’ve responded to it seriously and substantively. And we have demonstrated that fact.”
South African born Greg Smith was based in London and overseeing Goldman Sachs’ Europe Middle East and Africa hedge fund operations, Smith is a graduate of US Ivy-League University Stanford, was a finalist to be a Rhodes Scholar and apparently headed the SA national table tennis team.
“Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia.” Smith said, “My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave.”