Twelve Years Inside Goldman Sachs

In March 2012, Greg Smith, an executive director and head of Goldman Sachs’ United States equity derivatives business in Europe, the Middle East, and Africa, publicly resigned through an opinion piece published in a major newspaper. His departure letter described what he characterized as a fundamental transformation in the firm’s culture over the course of his nearly twelve-year tenure.

Smith had joined Goldman Sachs as a summer intern while studying at Stanford University, subsequently working for a decade in New York before relocating to London. During his career, he advised two of the largest hedge funds in the world, five of the biggest asset managers in the United States, and three prominent sovereign wealth funds in the Middle East and Asia, with a combined client asset base exceeding one trillion dollars.

A Culture Built on Client Trust

According to Smith, Goldman Sachs had historically distinguished itself through a culture centered on teamwork, integrity, humility, and prioritizing client interests. He described this culture as the foundation that sustained the firm’s client relationships for 143 years — not merely profit generation, but a genuine institutional pride that attracted and retained talent.

Smith had been selected as one of ten employees, out of more than 30,000, to appear in the firm’s recruiting video shown on college campuses worldwide. In 2006, he managed the summer intern program for sales and trading in New York, overseeing 80 students selected from thousands of applicants. He stated that the turning point came when he could no longer tell prospective recruits in good conscience that Goldman Sachs was a great place to work.

The Shift Toward Profit Over Clients

Smith described a firm that had fundamentally reoriented its priorities. He alleged that client interests were being systematically sidelined in favor of maximizing the firm’s own profits. Leadership advancement, he wrote, had become disconnected from ideas and ethical conduct. Instead, generating revenue — regardless of method — had become the primary criterion for promotion.

He outlined three paths to advancement within the firm. The first involved persuading clients to invest in products Goldman wanted to offload because they lacked profit potential — internally referred to as executing on the firm’s “axes.” The second, called “hunting elephants,” meant steering clients toward trades that maximized Goldman’s revenue regardless of whether they served the client’s interests. The third involved trading illiquid, opaque structured products.

Internal Contempt for Clients

Among the most striking allegations was Smith’s claim that managing directors routinely referred to their own clients as “muppets” in internal communications. He described derivatives sales meetings where no time was devoted to discussing how to help clients succeed — the entire focus was on extracting maximum revenue.

Smith expressed disbelief that this behavior persisted even after Goldman Sachs had faced intense public scrutiny, including SEC investigations, congressional hearings led by Senator Carl Levin, and widespread media criticism characterizing the firm as a predatory institution. He noted that the most common question junior analysts asked about derivatives transactions was, “How much money did we make off the client?”

The Leadership Problem

Smith directed particular criticism at the firm’s senior leadership, including CEO Lloyd C. Blankfein and President Gary D. Cohn, arguing they had lost control of Goldman’s institutional culture. He warned that if the trajectory continued, the erosion of client trust would eventually threaten the firm’s survival.

He contrasted the current environment with his early years as an analyst, when the emphasis was on understanding finance, learning about clients’ goals, and figuring out how to help them succeed. The shift from client-centered advising to profit extraction represented, in his view, a fundamental abandonment of the principles that had made Goldman Sachs viable for over a century.

A Call for Institutional Reform

Smith concluded his resignation by urging Goldman’s board of directors to refocus the business around client service, remove individuals he described as “morally bankrupt” regardless of their revenue generation, and restore the institutional culture that had once attracted people for the right reasons. His central argument was straightforward: without client trust, the firm would eventually cease to exist, no matter how sophisticated its financial engineering.

The resignation letter became one of the most widely discussed corporate departures in recent Wall Street history, reigniting public debate about the culture and ethics of major investment banks in the aftermath of the 2008 financial crisis.