Belfast Telegraph

No 'toxic' culture in our office, Goldman Sachs says

By Stephen Foley

Goldman Sachs is ready to give its London office a clean bill of health after investigating claims from its former employee Greg Smith that the bank had a "toxic" culture where traders routinely boasted of ripping off their clients.

The investigation - dubbed "the muppet hunt" because Mr Smith said bankers derisively referred to clients as muppets - has not so far thrown up any revelations that would prompt disciplinary action, it is understood.

Goldman has made contact with Mr Smith and asked him to assist, but he has not taken the bank through his allegations. Instead, he is working on a tell-all book, after landing a reported $1.5m (£930,000) advance from the publishing house Hachette.

Mr Smith, a trader of equity derivatives at Goldman's offices in the City of London, stunned the bank last month by announcing his resignation in the pages of The New York Times.

In an opinion piece, under the headline 'Why I am leaving Goldman Sachs', he described how the bank's moral standards had collapsed over his 12 years at the firm and he blamed the "toxic and destructive" culture on the chief executive, Lloyd Blankfein, and his deputy, Gary Cohn.

"It makes me ill how callously people talk about ripping their clients off," Mr Smith wrote. "Over the last 12 months I have seen five different managing directors refer to their clients as 'muppets', sometimes over internal email."

Mr Smith's public denunciation of the firm ignited another firestorm of public criticism of Goldman, which is already the lightning rod for anger over Wall Street's role in the credit crisis.

His allegations also threatened to hit the bank where it is most vulnerable, by tarnishing its reputation with clients.