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Only a few weeks after the headline-making departure of Greg Smith, who was an executive at Goldman Sachs Group, Inc. (NYSE:GS).  Under a month later, Yoel Zaoui, co-head of global M&A will be stepping down.  This is rather unfortunate for Goldman because they were the top mergers and acquisitions advisor last year.  Now the co-head of the department is stepping down.

Yoel Zaoui was only co-head for 11 months but certainly left a powerful mark as he rolled up the ranks since he joined Goldman 25 years ago.  His brother was also a successful M&A advisor at Morgan Stanley.  Once Zaoui’s brother left Morgan Stanley in 2008, the two brothers had talked about opening up their own firm.  It should be interesting to see if they try to pursue opening up their own firm.

As for Goldman, this is not a good sign when your executives are leaving the company.  Unfortunately, it is not immediately clear what reasons Mr. Zaoui had for leaving but Greg Smith made his reasons known.  Mr. Smith left because he believed the company was not holding the right values, particularly with customers.  Mr. Smith felt that the bank was more interested in making a profit for itself than for the customers.  I will be actively watching any new updates to see whether Mr. Zaoui’s departure is under similar circumstances.

As of right now, Goldman is taking a bit of the brunt however; it seems as if JP Morgan is taking over on the “greed” front.  In recent months, there has been an interesting trend developing.  JP Morgan was involved with MF Global and Lehman Brothers in both of the firms’ final weeks.  There is definitely something not right here and you can bet that the Feds will be watching.

Regardless, bank earnings are rapidly approaching kickoff on Friday with Wells Fargo and JP Morgan reporting.  As I have mentioned recently, I believe both banks will beat earnings and I expect similar results from Morgan Stanley and US Bancorp.  These banks are the best in the US, in my opinion.  All have successfully passed Fed’s stress test and are meeting the Fed’s tier 1 capital requirement.  On top of that, these banks have recovered much faster than the rest of the group and I believe they have positioned themselves at the front of the pack.  I also will be watching Bank of America and Citibank to see how these two banks are coming along in their recovery.