Goldman Sachs exec resigns with missive

Goldman Sachs, arguably the most storied investment bank on Wall Street, has been compared to a money-sucking vampire squid and called the evil empire of finance. On Wednesday it got a black eye delivered by one of its own.

Greg Smith, an executive director at the bank, resigned with a blistering editorial that accused the bank of losing its "moral fiber," putting profits ahead of customers' interests and dismissing customers as "muppets." The decline of the bank's culture, he wrote, threatened the bank's survival after 143 years.

The stinging editorial, "Why I Am Leaving Goldman Sachs," appeared in The New York Times, was the talk of Wall Street and was widely circulated online. Smith became a trending topic on Twitter, the social network website.

CNBC, the financial news channel, ran clips of the ornery balcony critics from "The Muppet Show." Other websites quickly posted spoofs: "Why I am leaving the Empire," allegedly penned by Darth Vader from "Star Wars," got attention.

Goldman swiftly issued a three-sentence statement disagreeing with Smith. "In our view," the bank said, "we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves." Smith worked for Goldman in London, but the bank did not provide further details.

The Smith editorial comes as outrage against Wall Street excess has bubbled up in popular culture, most notably through the Occupy Wall Street protest movement, and in the presidential campaign.

Smith, identified by The Times as head of the company's United States equity derivatives business in Europe, the Middle East and Africa, wrote that he attended sales meetings in which helping clients make money was not part of the discussion. He wrote that Goldman had devolved from a company he was proud to work for when he joined.

Smith wrote that there are easy paths to becoming a leader at Goldman, including persuading clients to invest in products the company wants to get rid or will bring the most profit to Goldman.

On Wall Street, the editorial may have been shocking in tone, but it was not surprising in content. Goldman's peers, even some of its customers, take its pursuit of profit as ordinary business.

"I would be very surprised if it did anything more than anger the people who are already hostile to Goldman," said Lawrence Baxter, a former executive at Wachovia who teaches at Duke University's law school.

He added that it was difficult to tell whether the editorial was "a genuine indication that things are badly out of line or just somebody who's really disgruntled."

Goldman is known for churning out leaders who run the world. Henry Paulson, who was Treasury secretary when the government devised its $700 billion rescue of the banks in 2008, is a former chief executive. So is Jon Corzine, the former New Jersey governor who was at the helm of the brokerage MF Global when it collapsed.