During Greg Smith's first week at Goldman Sachs, he was issued an identification badge, an e-mail address and each morning he had to scramble to make sure he got an 18-inch folding stool.
In the first chapter of his book “Why I Left Goldman Sachs, A Wall Street Story,†Mr. Smith writes that interns carried the stool with them at all times because there were no spare chairs on the trading floor. The stool, he said, was a Goldman status marker, a sign that one was an underling without a permanent chair.
The book, which is scheduled to be released by Grand Central Publishing next Monday, follows an opinion piece in The New York Times that Mr. Smith wrote in March. In that article, Mr. Smith, a former salesman for the firm, portrayed a corrupt corporate culture, saying it made him ill how “callously†employees at Goldman talking about “ripping off†their clients.
Based on just the first chapter - a copy of which was obtained by The New York Ti mes - it is unclear what Mr. Smith will say about the Wall Street firm. The first chapter details mainly the ultra-competitive culture inside the firm. But the titles of some other chapters - “Welcome to the Casino†and “Monstrosities†- suggest they may prove more embarrassing to Goldman.
Still, the first chapter does suggest Mr. Smith was either a very good note taker during his 10-plus-year career at Goldman - or has a photographic memory. One passage is written as if it were based on a transcript. Mr. Smith is also selective in who he names. He singles out friends like Mark Mulroney, the son of former Canadian prime minister, for example, but refers to others only by their first names.
The leaking of the first chapter of Mr. Smith's book comes on the eve of the firm's third-quarter earnings report. The March article struck a nerve, both at Goldman and more broadly. Within 24 hours, it had more than three million views online and publishers began b idding for the rights to a book. Grand Central Publishing, a division of the Hachette BookGroup, secured the deal, offering Mr. Smith an advance of close to $1.5 million, according to people with direct knowledge of the negotiations.
Mr. Smith hasn't spoken publicly since the publication of the March op-ed piece. He is scheduled to appear this Sunday on “60 Minutes†and has given no other advance interviews on his book. As for Goldman, it began an internal investigation to check the veracity of Mr. Smith's claims. Mr. Smith, in the op-ed piece, said Goldman often refers to its clients as muppets, British slang for a stupid person. Goldman did an e-mail search for the word and found a number of references but a person briefed on the matter but not authorized to speak on the record said almost every one was referring to the movie of the same name.
The first chapter, titled ‘I Don't Know but I'll Find Out†begins on Mr. Smith's first day at Goldman, whe re he was one of 75 interns in the sales and trading program. Twice weekly he attended what are known inside Goldman as ‘Open Meeting', which he says is the firm's version of boot camp for trainees. The meetings started at 6 a.m. and if enough people showed up late, the entire class had to attend a make up meeting at 5 a.m. the next day.
He writes that a partner would stand at the front of the room, list in hand, and call on people questions that could range from the year the company was founded to Goldman's position on a certain stock. Mr. Smith had a strategy for survival, volunteering to answer the questions he knew the answer too in hopes it would make him a less likely candidate for questions he didn't know.
Those caught without an answer would typically run out of the meeting and head to another building nearby that housed Goldman's main trading floor. They would be expected to return before the meeting was over with the right answer.
Not eve ryone survived, he says, recalling an exchange in transcript form between one intern and a Goldman vice president over Goldman's view on Microsoft that sent the intern running from the meeting in tears.
Still, Mr. Smith, the son of Johannesburg pharmacist, says he immediately embraced the Goldman culture. He writes that he got an interview at the firm because he knew that the first two people to apply online for Goldman internships get interviews.
Mr. Smith worked on Goldman's equities trading floor in lower Manhattan. He writes that many of his days were spent hauling his stool around the floor, shadowing various trading desks. He would be called upon to grab research on stocks, and frequently was asked to get lunch for trading desks. The idea here, he said, if an intern gets a lunch order wrong they are probably going to mess up elsewhere.
Mr. Smith recalls one Goldman executive who asked an intern for a cheddar cheese sandwich. The intern came bac k with a cheddar cheese salad. The executive was furious, and threw the salad out.
