Professionalism/Greg Smith, Goldman Sachs and the New York Times

On March 14, 2012 the New York Times published an opinion piece titled "Why I Am Leaving Goldman Sachs" written by Greg Smith, a former Goldman Sachs executive. Smith left scathing reviews of the company's business ethics, citing a significant shift in company culture during his 12 years there. The article drew media attention but uncertainty surrounding Smith's motives brought question to its contentions.

Greg SmithEdit

Greg Smith began his career with Goldman Sachs as an intern while studying at Stanford University. After graduating, he worked full-time at the firm from July 2001 to March 2012. He resigned in 2012 while working in London as Goldman Sachs's executive director and head of United States equity derivatives business in Europe. On his last day, he wrote an article titled "Why I Am Leaving Goldman Sachs", heavily criticizing the firm. Later, Smith wrote a book titled Why I Left Goldman Sachs: A Wall Street Story, elaborating further on his frustrations with the company. He is now employed as the head of Business Development and Partnerships at the financial firm Wealthsimple[1].

Goldman SachsEdit

Goldman Sachs (GS) is a multinational global investment banking, securities and investment management firm headquartered in New York City [2]. It has been criticized for contributing to the 2008 financial crisis, but has a generally excellent reputation. James Trant, a second year analyst at GS described the firm as highly challenging but also rewarding, telling stories of being both congratulated and warned after receiving his offer[3]. GS is highly sought after and extremely selective. In 2016, 130,000 applied for 5,000 internships- an acceptance rate of 3.8%[4]. In 2017, the company had nearly 36,600 employees[5].

The New York TimesEdit

The New York Times describes itself as, “a global media organization dedicated to helping people understand the world through unrivaled, on-the-ground, expert and deeply reported independent journalism”[6]. Founded in 1851, the Manhattan based paper has grown to be one of the world’s largest news outlets with a daily readership of 9.32 million [7].

"Why I Left Goldman Sachs"Edit

On March 14, 2012, Greg Smith resigned from Goldman Sachs and the New York Times published Smith's intensely critical piece, "Why I Am Leaving Goldman Sachs." In the piece Smith calls the work environment "as toxic and destructive as I have ever seen it" and says he sees "virtually no trace of the culture that made me love working for this firm for many years." Specifically, he claimed that Goldman Sachs had transitioned from a client-driven to profit-driven practices that now encourage ripping clients off. Smith does not substantiate his claims with quantitative evidence, but claims his grievances are a result of a culture shift, citing instances in which managing directors refer to their clients as "muppets", "ripping eyeballs out" and concern with "getting paid"[8].

Uncovering MotivesEdit

This case is complex because Smith's claims lack concrete evidence, yet still may be valid. He criticizes intangible methods of operation and executives' attitudes that depreciated gradually. Smith lacked substantiation in his original piece, allowing GS to defend their reputation. To better understand what was happened at GS, the motives of all parties involved must be examined.

Smith's PerspectiveEdit

Greg Smith claims his goal was to "make the client the focal point" of Goldman Sachs's business by elucidating its unethical practices[8]. It is unknown if Smith submitted his opinion piece elsewhere, but his choice of the New York Times is intriguing, for reasons beyond the paper's large readership. Smith lived in London at the time, yet chose to publish in a New York paper. It may have been Smith's intention to hit GS close to home. Could Smith have been voicing true frustrations knowing his piece would do little damage to a corporate power like GS? Was he doing so in response to his impending termination? Would he have done this if the circumstances surrounding his job and performance were different? Why did he not speak up earlier? Why did he not use his position of power to try and change these practices? These answers are largely up for interpretation.

Specifically, consider the following claims about Greg Smith:

Goldman Sachs claimed that Greg Smith's performance was less-than-average[9]. We assume this is true, though Goldman Sachs is the only source. This claim could be used as evidence to support the theory that Greg Smith published the article merely as an act of spite. However, his performance may have suffered because he refused to exploit his clients, unlike his fellow employees.

Goldman Sachs claimed that Greg Smith always rated Goldman Sachs's culture and the conduct of his peers favorably[10]. This again could be used as evidence that Greg Smith is lying about Goldman Sachs. But it could also be that Greg Smith had a careerist attitude during his time at Goldman Sachs, and chose to hide his ethical concerns about the company so he could keep his job--up until the point that he finally decided to quit.

Overall, the theory that Greg Smith was frustrated with Goldman Sachs for selfish reasons and the theory that he was frustrated for ethical reasons are both plausible. However, the doubt inherent in Goldman Sachs's claims about Greg Smith and vice-versa make it difficult to decide on the veracity of Greg Smith's article.

Goldman Sachs's PerspectiveEdit

On October 19, 2012, seven months after Smith published his original opinion piece and three days before he published his book, Goldman Sachs issued a memo to all of its employees and some former employees briefing them on the company's response to Smith's accusations. They provided a brief response to the media stating, "Mr. Smith's op-ed portrayed a firm that is unrecognizable to us and directly opposite to the culture we work hard to foster, but we took his claims seriously and conducted a thorough review of them. That review found no evidence to support his claims, but did find that Mr. Smith appeared to be frustrated about his career and future prospects at Goldman Sachs"[11].

After their initial defensive statement, Goldman Sachs attacked Smith personally. They leaked information that he had been denied a request for a promotion and near doubling of his salary in January 2012, two months prior to his departure. They also noted that Smith's performance reviews regularly ranked in the bottom half for Goldman Sachs executives. Communication excerpts from his superiors show GS was considering terminating Smith prior to his departure[12].

Regardless of Smith's intentions, he incited conflict with Goldman Sachs by publicizing his criticisms, and Goldman Sachs was unlikely to submit to Smith and publicly admit wrongdoing no what resulted from the investigation. Goldman Sachs is the more powerful party in this conflict, and given that it maintained an excellent reputation after the 2008 financial crisis, its executives were likely unthreatened by Smith's accusations. However, Goldman Sachs's stock dropped about 3.4% the day that Greg Smith's article was published, on a day that most other stocks rose[13]. Although the stock bounced back, admitting to Greg Smith's claims could have cost Goldman Sachs a significant amount of money. Therefore Goldman Sachs had powerful motivation to deny Greg Smith's claims independent of their truthfulness. On the other hand, if Greg Smith's claims were false, Goldman Sachs's response was perfectly ethical--all they did was present evidence in their defense and in the defense of their stockholders.

The New York Times's PerspectiveEdit

The New York Times published Greg Smith’s original article, “Why I Am Leaving Goldman Sachs” on March 14, 2012. The article was unsolicited and sent via email to the Times’ submission address. The paper does not publish all op-ed pieces submitted, and thus made a decision to include Smith’s work. However, ethical press has no allegiance. The Times had a duty to publish this piece and allow its readers to form their own opinion. They did first confirm the identity of Smith as a Goldman Sachs executive. After submitting his article, Smith contacted individual editors about his work. Finally, the Times sent a London-based reporter to meet with Smith. An off-the-record conversation occurred in a Starbucks, where Smith claimed to have no qualms with Goldman Sachs and did not believe he would have been terminated [14]. The Times did not reach out directly to Goldman Sachs’ for a response prior to or following publication of Smith’s article. Had one been provided, the paper may have had an equal duty to publish it.

It is also arguable that the New York Times should have done more investigation before publishing Greg Smith's article, because Greg Smith's word was the only source they had. As seen earlier, Smith's claims cost Goldman Sachs money (due to a drop in stock value) in addition to reputational damage[13]. It is reasonable to believe that the Times increased this effect by publishing Smith's article, due to the Times's large reader base and respected status. It is possible that the Times's motivations were not pure either, as claims similar to Smith's were featured in earlier Times articles[15]--therefore, the Times could have been satisfying their own agenda or preconceived opinion of Goldman Sachs when publishing Smith's article.

On the other hand, it could be argued that the Times was ethically obligated to publish Smith's piece, because it guaranteed that his claims would be addressed. Either Smith's claims would be refuted (in which case Goldman Sachs would remain relatively unharmed), or they would be confirmed (in which case Goldman Sachs's current or prospective clients would have a chance to escape being exploited, and Goldman Sachs would be more likely to fix its ethical problems).

These two arguments make the Times's position complicated. Given unsubstantiated claims, who should they give preferential treatment--Goldman Sachs's employees and their stockholders, or their clients? A wrong choice in either direction will result in some harm to an innocent party. This is all speculative, but it demonstrates that the New York Times is not immune to serious ethical questions in this case.

Conflicting AgendasEdit

While Greg Smith claims, his goal was, “more ethical practices at Goldman Sachs,” it is hard to discern if he had other motives. The information released by the firm regarding Smith’s performance and denied requests for promotion and salary increase casts a shadow of doubt. Did Smith only release the piece to get back at the firm? Would he have done this if his requests had been granted? It cannot be known for sure. It is possible that he felt practices at Goldman were truly unethical, but only raised concern once he felt he was nearing termination. It is also possible that his performance scores were low due to an inconsistency between his and the firm’s values. Did Goldman Sachs score employees on their contribution to the firm while Smith continued to focus on contributions the client? The answers to these questions are further blurred by the sheer size and power of Goldman Sachs. Whether or not Smith’s claims were true, he likely stood no chance against such a prominent financial giant. Goldman Sachs claims to have conducted an investigation with found no evidence substantiating Smith’s claims. However, if evidence had been found would the firm have admitted it? It is highly unlikely. The true motives in this case are unknown, but it most certainly raises many broader ethical questions.

Key Ethical QuestionsEdit

  • How should individuals within companies address behavior they see as unethical?
    • Should behavior be addressed internally first or immediately disclosed to the public?
  • How does an individual address unethical “culture” versus specific behaviors (i.e. choosing to ignore design flaws for the sake of profit)?
  • How does the power an individual has within a company affect the ethicality of choosing to leave the company and publicly report unethical conduct?
    • Do they have a duty to stay and attempt to fix it?
  • How should the media address the account of a prominent individual against a corporate giant?
    • Did the NYT have a duty as a reputable media outlet to publish Smith’s piece?
    • Should they have reached out to Goldman Sachs' for a response?
  • How should individuals with similar concerns proceed once unethical culture is publicized?
    • If others shared his concerns, should they have spoken out in support of Smith?
  • How does one separate personal frustrations, i.e. disputes over salaries and promotions, while addressing company-wide ethics?
  • How should uninvolved individuals respond to unverified claims of professional misconduct? Are they ethically obligated to accept or reject such claims? How might the appropriate response depend on the case?


  1. Greg Smith (n.d.). LinkedIn
  2. Goldman Sachs (n.d.). Who We Are: At a Glance
  3. Butcher, Sarah (2017, December 27). efinancialcareers. “I’m a 2nd year IBD analyst at Goldman Sachs. This is the reality”
  4. Butcher, Sarah (2017, February 7). efinancialcareers. These are the students Goldman Sachs REALLY wants to hire
  5. Statista (2018). Number of employees at Goldman Sachs worldwide from 2009 to 2017 (in thousands).
  6. The New York Times Co. (2018). Who We Are.
  7. Statista (2018). Number of readers of the New York Times in the United States from spring 2008 to spring 2017 (in millions).
  8. a b Smith, Greg (2012, March 14). The New York Times. Why I Am Leaving Goldman Sachs.
  9. “Goldman Sachs, n.d.
  10. O’Toole, 2012,
  11. Roose, Kevin (2012, October 20). New York Magazine. Goldman Sachs Reveals Its Greg Smith Battle Plans.
  12. O'Toole, James (2012, October 18). CNN Money. Goldman Sachs hits back at Greg Smith.
  13. a b (NYSE, n.d.)
  14. Zeitlin, Matthew (2012, October 22). The Nine Biggest Revelations in 'Why I Left Goldman Sachs'.
  15. Craig, 2011