Will Goldman's CEO survive Greg Smith's rant?
Lloyd Blankfein is in the crosshairs after a former employee accuses the company of ripping off its clients.
Smith assailed Goldman for its "toxic and destructive" business practices and "morally bankrupt" culture, and placed the blame squarely on CEO Lloyd Blankfein. The controversial Goldman boss has already been blasted by lawmakers for his company's dubious deals, and has forked over millions of dollars to settle fraud charges brought by the SEC.
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Smith's rant wasn't just a public relations debacle: Goldman's stock price dropped 3.4% the day the op-ed was published, wiping out $2.2 billion in shareholder value.
Will Blankfein be forced to resign?
Goldman must oust Blankfein: Smith's resignation letter "would be a devastating indictment of any kind of business," says Frederick E. Allen at Forbes, but it's particularly bad for a bank supposedly built on trust. Goldman's clients (whom the firm's employees apparently call "muppets") now know they're being ripped off at every turn. "Isn't a flight to the doors inevitable," Allen asked. Goldman has brought this "terrible damage" on itself, and "must take drastic action to restore its reputation." The company's reform "must start at the top."
But Blankfein is still quite popular: Blankfein has the best approval rating of any CEO on Wall Street, says Jane Wells at CNBC. According to Glassdoor.com, 94% of Goldman employees approve of his leadership, and Goldman itself outranks JPMorgan Chase (JPM) and Citigroup (C) for employee satisfaction. Clearly, not everyone is as disgruntled as Greg Smith.
Goldman will have to change: The easiest way to change perceptions of Goldman is to change its leadership, says John Cassidy at The New Yorker. But "given the iron grip that Blankfein exercises on Goldman, I don't think this is going to happen, at least not for awhile." However, even Blankfein "must realize that the take-no-prisoners business model he had championed" is "backfiring." Goldman is up to its ears in conflicts of interest, and has been the most aggressive and shameless profit-hunter on Wall Street -- and now he and the firm are paying the price.
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It's about time someone told the truth about this bubble creating, gas price manipulating slime serpent sucking the very blood out of the American people!
Suggest interested readers look up the Rolling Stone article titled: "The Great American Bubble Machine", by Matt Tiebie (sp?)
Goldman employees approve of his leadership
So the Beatles were wrong, you can buy me love.
LoL, he gave new meaning to the truth will set you free.
I notice that Goldman's is not suing which means the rant was probably true. If I had that kind of money, I would no longer deal with these folks for anything.
Goldman's lost me a long time ago anyway. I consider them in the same lane as the defunct Enron.
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The offering could become the second-biggest this year if underwriters exercise an option to buy more shares.
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