Goldman Executive Resigns, Calls Firm’s Environment “Toxic” (GS)

Greg Smith, an executive director at Goldman Sachs (NYSE: GS), resigned today and called the environment at the firm “as toxic and destructive as I have ever seen it.”

In an Op-Ed column in the New York Times, Smith, who was with Goldman for 12 years, said that the firm has veered so far from the place he joined right out of college that he can no longer in good conscience say that he identifies with what it stands for. He wrote that to put the problem in the simplest terms, the interests of client continue to be sidelined in the way the firm operates and thinks about making money.

Smith, who was based in London, was the head of Goldman’s U.S. equity derivatives business in Europe, the Middle East and Africa. Smith said that Goldman has become too much about shortcuts and not enough about achievement. Smith has blamed the top management at Goldman for the toxic environment.

He says that top officials at the firm coldly talk about “ripping their clients off.” He notes that in the past year he has seen five different managing directors refer to their clients as muppets.

The comments from Smith have further tarnished the reputation of Wall Street firms. The financial crisis of the 2008 has been squarely blamed on Wall Street firms, who were responsible for selling toxic mortgage backed securities to investors.

Goldman shares are marginally lower in early trading today. At last check, the stock was trading 0.39% lower at $124.05.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.