Goldman Shares Dive After Exec's Attack

Scathing op-ed costs shareholders $2.2B
By Rob Quinn,  Newser Staff
Posted Mar 15, 2012 2:01 AM CDT
Updated Mar 15, 2012 4:15 AM CDT
Goldman Shares Dive After Exec's Attack
Goldman Sachs CEO Lloyd Blankfein, left, and company president Gary Cohn, center, have destroyed the firm's culture, Smith charged.   (AP Photo/Richard Drew)

(Newser) – Goldman Sachs shareholders had a bad day yesterday thanks to departing exec Greg Smith, who slammed the firm's "toxic and destructive" culture in a New York Times op-ed. The investment bank's shares dived 3.4% in trading yesterday, wiping $2.2 billion off its market value—although shares are still up 33% for the year. Former Goldman partners interviewed by Bloomberg describe Smith as relatively junior and an apparently disgruntled employee, although most of them agree with his criticisms of the firm's current management.

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The article, which circulated rapidly around Wall Street, "does hurt them," a former Citigroup banker says. "The perception of the firm has gone down, and a lot of the winners of tomorrow are sitting back and thinking, ‘Do I want to be with Goldman?'" One former Goldman partner, now a New York University finance professor, notes that whistle-blowing is very rare in the industry—especially at Goldman—and predicts that Smith won't be able to find another job in finance. "Who’s going to hire someone who would do that?” he says. “The industry will close ranks on such things as whistle-blowing in this context." (Read more Goldman Sachs stories.)

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