Greg Smith is not the first person to have a gripe with his employer, or the first person to twig that the Wall Street bank is obsessed with profit. After all, over the last 12 years he's been drawing millions of pounds in bonuses from the bank everyone loves to hate. His tenure with the Vampire Squid has put him in the relatively rare position of already being rich enough not to care how his remarks might rebound.
Or perhaps he's just gearing up for a book deal with his letter of resignation "Why I am leaving Goldman Sachs" – published in the New York Times – acting as the ad campaign.
But his rant about Goldman has amplified the bank's biggest problem – its increasingly damaged reputation. A series of revelations has led critics to claim that Goldman has moved from focusing on its clients to focusing on itself. It's 2007 "Abacus" deal sparked an investigation about whether the bank knowingly sold housing securities it knew its clients would lose money on. Last year, it agreed a $550m (£351m) forfeit settlement with the US regulator.
Meanwhile, it is currently in the midst of a court case in the US about its apparent conflict of interest in the $21.1bn El Paso acquisition where the bank acted as adviser to the company but also owned a $4bn stake in the acquirer.
In 2010, the bank published a magnum opus about its ethics in an effort to increase transparency and remind the world of its client focused "core values".
But Smith paints a picture of a firm that manipulates, ridicules and "rips off" its clients and their needs. He claims the "culture" and the "identity" of the bank has become "as toxic and destructive as [he has] ever seen it". Goldman managers "sideline" their clients and call them "muppets", he alleges.
Dave Way, of accountancy recruiter Marks Sattin said: "Smith's letter of resignation is a show either of supreme confidence or wild recklessness. By including in his attack on Goldman Sachs' culture the fact that he's a dab hand with a table tennis bat and came close to a Rhodes scholarship, he makes it plain the letter serves both as much as a CV as a valedictory slap in the face to his former colleagues."
A spoof version of the letter released today and entitled "Why I am leaving the Empire, by Darth Vader" pokes fun at the exaggerated shock of a man 12 years in situ who suggests that Goldman was once a client utopia that has turned nightmare. "The firm has veered so far from the place I joined right out of Yoda College that I can no longer in good conscience point menacingly and say that I identify with what it stands for," the Daily Mash quipped
The truth is, Smith – only a vice president, the second most junior position in the bank – is a disenchanted voice out of 30,000 staff. He will not be alone in a world increasingly critical of banks, but according to Goldman's chief executive Lloyd Bankfein, who wrote to all employees yesterday, 89pc of staff believe the bank offers exceptional service. Goldman insisted: "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."
Many of Goldman's clients would happily ride to its defence. But most are aware you have to be savvy when it comes to the Wall Street firm. "Goldman's desire for making money is more aggressive than most. We are eyes wide shut to that because they are big boys and so are we," said one hedge fund manager.
The El Paso case unearthed a conversation between Blankfein and El Paso chief Douglas Foshee where Blackfein thanked Foshee for using Goldman as El Paso's adviser. "We are very sensitive to the appearance of conflict," he said.
After Smith's outburst, the question is when and if Goldman will have to start acting on such appearances.
The Telegraph
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