Goldman Sachs banker quits ‘toxic’ firm

Greg Smith, executive director at Goldman Sachs, has written an open letter to The New York Times saying he will resign Wednesday and that the investment bank has become “toxic.”

Goldman Sachs said it disagreed with the views expressed, “which we don’t think reflect the way we run our business.”

Goldman’s memo to staff

Smith calls bank’s environment “as toxic and destructive as I have ever seen it” and takes aim at its leadership.

The New York Times describes Smith as head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa. It says he is resigning Wednesday.

Smith’s letter says he has been with the firm almost 12 years, long enough to understand the “trajectory of its culture.”

He says the firm has changed the way it has thought about leadership and is now focused on money rather than helping the client. “When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch,” the letter says.

Smith also says: “It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets,’ sometimes over internal e-mail.”

In its response Goldman Sachs also said: “In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”