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Goldman Sachs Judas blazes media path

Published: March 15, 2012 | 7:58 am
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NEW YORK — Greg Smith gained an overnight reputation as the Judas of Goldman Sachs by writing a scathing indictment of the investment bank.

Talk about creating a buzz: Smith took the extraordinary step of writing a highly unflattering op-ed piece on Wednesday for the New York Times NYT -1.23% . By doing so, he broke ranks with a world in which the big-money crowd on Wall Street happily pockets its bonuses and doesn’t tend to rock the boat in public.

A Goldman Sachs spokeswoman subsequently told the Times: “We disagree with the views expressed, which we don’t think reflect the way we run our business.”

But the damage to the firm’s image has been done. Smith, a Wall Street star, has introduced another chapter to his legacy. Eventually, he may add another credit. He could be regarded as a media trailblazer in the rarified world of disgruntled millionaires everywhere.

“Wall Street traders come and go all the time, but few have quit with the flair of Greg Smith,” the Times noted in a news story about the op-ed.

In the op-ed heard ‘round the world, Smith blasted Goldman’s corporate culture and its attitudes toward clients. Smith resigned Wednesday as the executive director and head of the U..S. equity derivatives business in Europe, the Middle East and Africa for Goldman Sachs Group Inc. GS +0.15% .

Most-read story

As of late Wednesday afternoon, the op-ed had about 3 million page views, Times spokeswoman Eileen Murphy told me by email.

Murphy added: “It’s the most heavily trafficked story on the site. The second story in terms of traffic is the business section story about the resignation. That story has over a half million page views, as of the same time period.”

Think about it. Smith’s first-person broadside attack received about six times as many page views as the news account of it. Clearly people ate up the red meat that Smith served.

In his attack, the former Goldman official alleged that the prestigious securities firm stressed profits to extreme levels. He said Goldman’s bankers labeled clients in a derogatory manner, as “muppets.” Ultimately, he points a finger at Lloyd Blankfein, Goldman’s CEO, and his leading lieutenant, Gary Cohn.

Goldman will likely feel the brunt of Smith’s outburst for years to come, underscoring how the media can help people communicate ideas to a mass public.

News release on steroids

And that’s the big-picture point here: that disgruntled millionaires on Wall Street, superstar athletes, political kingpins, corporate executives, movie stars, pop singers and everyone else under the sun can take advantage of the media.

They can all communicate to the broad public their gripes, protests, complaints and bitterness in an unfiltered way. Consider what Smith did as a news release on steroids.

Increasingly, prominent professional athletes have been employing Twitter to communicate solidarity for their friends — as well as to make known their special grievances. Look for this trend to continue, regardless of how the players’ bosses detest the practice of yapping on the Internet.

“I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work,” Smith wrote in his op-ed.

“It makes me ill how callously people talk about ripping their clients off,” Smith wrote, leaving nothing to the imagination.

Imagine if Mike D’Antoni, who resigned Wednesday as the coach of the downtrodden New York Knicks, published his version of a noisy exit on ESPN.com DIS -0.07% . It would cause a stir in the sports universe.

The Internet is changing all of society’s rules — especially those of modern communications. Now, a hot-shot at Goldman Sachs, the king of Wall Street, takes advantage of the media’s clout and reach as he exits the firm with guns blazing.


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