Goldman Sachs CEO Lloyd Blankfein; Miss Piggy.
Goldman Sachs, still smarting from the scathing public resignation of 32-year-old banker Greg Smith, is conducting a companywide e-mail scan looking for the word muppets and other derogatory terms, according to Reuters. While most Americans associate the Muppets with Jim Henson’s furry creatures, it turns out that muppets is slang for “stupid people” in Britain, where Smith worked in the bank’s London office.
Goldman’s muppet hunt is part of a broader review being undertaken by the bank to look into Smith’s incendiary charges, the wire said. In an op-ed for the New York Times published last Wednesday, Smith, who had been at Goldman for 12 years, accused the bank of putting its own interests before its clients’. It was a familiar charge: in 2010, Goldman paid $550 million to settle SEC charges that it had misled clients about a complex transaction involving hedge-fund billionaire John Paulson.
“It makes me ill how callously people talk about ripping their clients off,” Smith wrote. “Over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets,’ sometimes over internal e-mail.”
(MORE: Goldman Sachs Banker Quits ‘Toxic’ Firm: Will Clients Flee Next?)
This is not the first time Goldman has had to deal with potentially damaging e-mails. Recall the famous 2010 exchange between Senator Carl Levin, a Democrat from Michigan, and Goldman CFO David Viniar, in which Levin waved an e-mail printout from a Goldman trader describing a particular deal as “sh*tty” — a deal Goldman continued to sell to clients anyway. Asked for his reaction, Viniar said, “I think that’s very unfortunate to have on e-mail.”
If Smith’s charges are true, apparently some at Goldman didn’t get the message: It’s probably not the best idea to talk smack about your clients — or the products you’re selling them — in corporate e-mails. (Let’s set aside, for the moment, whether it’s substantively a good or ethical business practice to treat your clients with contempt or sell them “sh*tty” products.)
So what will Goldman do if it uncovers evidence that its executives have been disparaging its clients? Will it publish a mea culpa in the Times? Will it fire the offending employees? Will we ever know the results of its investigation? It’s easy to take the cynical view that this scan is little more than a dog and pony show, strategically leaked to the press in order to convey the impression that Goldman gets it and is determined to root out the rotten apples Smith wrote about. On the other hand, it’s possible that the e-mail scan itself might be designed as a warning to employees to watch what they write.
In any event, one has to imagine that if Smith was telling the truth, there may be a few Goldman bankers feeling hot under the collar. Speaking on Bloomberg TV Thursday, William Cohan, the author of Money and Power: How Goldman Sachs Came to Rule the World, said, “I wouldn’t want to be the guy who used the word muppets in an e-mail right now.”