A week after the famous op-ed by Greg Smith, the controversy is still alive. The letter accused Goldman Sachs Group, Inc. (NYSE:GS)of some of the worst crimes ever comitted on Wall Street.
ValueWalk was very skeptical about the whole op-ed to begin with. We tweeted the following on the day of the op-ed.
After this whole FoxConn thing how do we know greg smith didnt make up the entire article…? $AAPL $GS
— VALUEWALK LLC (@valuewalk) March 16, 2012
We were refering to the false story covered by the entire media about Foxconn’s allegeged working conditions in their Chinese factories. Foxconn is a supplier of Apple Inc., and the story did not make the companies look too good. Later it turned out that the story was entirely false.
ValueWalk spoke to some sources at Goldman Sachs Inc. who work in the New York office, unlike Greg Smith, who was thousands of miles away from the corporate headquarters. These sources, have been at Goldman Sachs for a longer period of time than Mr. Smith was. Furthermore, they worked in various branches of the bank, so we were able to get a broad picture of the situation.
The sources all stated that they know the names of all high ranking people at the firm. They had never heard of the name Smith, until the New York Times op-ed. Smith was a low ranking employee in the corporate chain at the firm.
The sources stated that senior representatives of the firm visited every single department to ‘de-brief’ them. The Company wanted to make sure that employees were not upset by the news. The feeling at the firm, was that the incident was unfortunate and was made too big of a deal by the media. Considering the person’s low level position, the story should have been a non-issue. Howeve since people seem to hate Goldman Sachs more than any other firm, the news was bigger than it would have been had the incident occurred at Wells Fargo, for example.
We asked why Greg Smith decided to take this strange course of action. Goldman sources were close to certain that Smith realized for whatever reason he would never make managing director. Instead of just switching firms, he decided to go out with a bang. He committed career suicide by his actions.
Employees agreed that Smith likely exaggerated the situation at Goldman, in order to sensationalize the story. We mentioned that Smith likely had a few book deals lined up, and that would likely be his only future way of earning an income. ValueWalk noted this on a tweet the day of Smith’s op-ed, stating:
I wonder how many book offers Greg Smith has already received. Id be surprised if the # is less than double digits $GS
— VALUEWALK LLC (@valuewalk) March 16, 2012
It turns out that we were correct. Julie Bosman of the New York Times, penned an article, which stated that Smith is receiving numerous book offers from publishing houses.
Mr. Smith, who ran Goldman Sachs’s United States equity derivatives business in Europe, the Middle East and Africa, has met with publishers this week, including imprints at several prominent houses.
According to several people who were present, Mr. Smith described his book as a coming-of-age story, the tale of someone who came into the business with good intentions and sky-high ideals that were ultimately pierced by Goldman’s obsessive focus on making money.
There we have it! Smith was looking for a massive book deal, and thought it was worth ending his career on Wall Street for it. However, we will likely never know the real truth behind his claims.
