'After almost 12 years at the firm, I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it;’
— 'The problem — in its simplest terms, is that clients are sidelined in the way the firm operates and thinks about making money.'
— ‘I have always taken pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs.’
— ‘Today, if you make enough money for the firm (and are not currently an axe murderer) you will get promoted into a position of influence.’
What are the three quick ways to become a leader?
'a) Execute on the firm’s “axes,” which is Goldman speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit.
b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them.
c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.'
— 'I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients.
It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.'
'That's why a number of managing directors refer to their customers as 'muppets'.'
— 'Will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.'
Conclusion: don't be a muppet!
Update 2020:
Goldman Sachs has agreed to pay $2.9 bn to settle a US-led investigation into its role in the 1MDB corruption scandal. In July Goldman agreed to pay $3.9 bn to Malaysia over its role in the fraud.
The settlement, which covers criminal fines, penalties and disgorgement, was part of a coordinated agreement between the bank and the US Department of Justice (DoJ) along with regulators in the US, UK, Singapore and Hong Kong.
