For several months, Goldman Sachs had been worried about what confidential details might come out in a memoir by Greg Smith, a former midlevel executive and trader who worked at the firm for a decade.
While the book does repeat the allegations he first described in a New York Times Op-ed page article, insiders were relieved on Thursday after seeing bootleg copies of the book as it provided few new details of the “toxic†culture that he said prompted him to quit.
Long on Mr. Smith's reminiscences of the pleasures of the job - handmade suits, sashimi at 30,000 feet, strawberries at Wimbledon - the former Goldman salesman's book does not break much new ground on illegal or questionable financial practices at the firm.
There are moments that every veteran Wall Streeter might recognize and will trouble readers - like when bankers increase their bonuses by advising clients to buy the most-profitable products and then grumble when those payouts aren't big en ough.
Or telling hedge funds how to profit as countries like Greece teetered on the edge of default, while other Goldman bankers advised their governments on “how to fix the mess.â€
Despite this “hypocrisy,†as he terms it, “Nobody did anything about it. The bonus culture was just too entrenched. The numbers themselves militated against change.â€
Mr. Smith's Op-ed article, when it first came out in March the day he resigned, sparked a furor and fueled the debate about greed and excess on Wall Street. Goldman Sachs in particular, which had already been derided as a “Vampire Squid†and had faced regulatory inquiries on products linked to troubled subprime mortgages, again found itself under a media microscope.
In recent years, the firm has managed to profit even through some turmoil that felled other banks, including the 2008 financial crisis - a success some critics say is a result of ruthless tactics.
Mr. Smith attributes the shift to the ascension of Lloyd C. Blankfein, a former trader, as chief executive, as well as the changes wrought by the financial crisis on Wall Street. To him, his colleagues in London, where Mr. Smith worked before his abrupt exit, seemed less troubled by a nagging conscience than their counterparts in New York.
It was in London that Mr. Smith heard his colleagues first refer to clients as “muppets,†among the most incendiary bits in his March opinion piece.
“Muppets was a word that, for me, had once evoked childhood memories of cute puppets such as Kermit the Frog. But the way it was used in the London office had nothing to do with cuteness. Being a muppet meant being an idiot, a tool, manipulated by someone else,†he writes in the book.
And clients considered muppets might get a 15-minute-old price on a product, enabling Goldman traders to profit from the real-time price to the tune of more than $1 million.
When a client asks the trading desk to correct a mistake, not knowing the mistake was actually in the client's favor, he's soon called a muppet by Goldman's traders.
The memoir, “Why I Left Goldman Sachs,†is scheduled to be released on Monday. A spokesman for Goldman said he was “relieved†upon reading the book, which was provided to The New York Times by the firm.
Grand Central Publishing, a division of the Hachette Book Group, is reported to have offered Mr. Smith an advance of close to $1.5 million.
Goldman Sachs, for its part, has not been afraid to engage in a little hardball in the days leading up to the book's release. Goldman shared documents with Bloomberg News on Thursday detailing how months before he quit, Mr. Smith asked Goldman to double his salary to more than $1 million, and was denied a promotion.
The book does delve into his salary and bonuses over the years, including the times when Mr. Smith said he felt that he was inadequately paid for making millions for the firm.
And the book discusses some of the well-publicized fraud cases. But instead of new details about the case which prompted the Securities and Exchange Commission to charge Goldman with fraud in 2010, readers learn that one of the traders at the heart of the affair, Fabrice Tourre, was “slightly goofy†and “socially awkward.â€
Even after the S.E.C. action that Goldman settled for $550 million, Mr. Smith finds himself pressured to sell a financial product he nicknamed Clorox, which he likens to a bologna sandwich sold as “Panino de Bologna.†In a chapter called “Monstruosities,†he describes how he is dismayed that endowments, philanthropies and foundations “took the bait.â€
Mr. Smith describes his rise at the firm from an intern all the way up to a midlevel position in London as head of the U.S. equity derivatives business in Europe, the Middle East and Africa. Born in Johannesburg, Mr. Smith makes several references in the book to his family's roots in South Africa, where his grandparents had immigrated as Jewish refugees from Lithuania.
He won a full scholarship to Stanford and after graduating in 2001 landed a spot at Goldman, where he quickly worked his way up in the organization.
He acknowledges having some naivete about the workings of Wall Street, but at other times describes how seductive the money and lavish lifestyle afforded him.
As an intern he visits Scores, a well-known New York strip club, and after “what seemed like about five minutes of dances from a few blond bombshells,†Mr. Smith runs up a tab of $750. “Seven hundred and fifty dollars! I certainly didn't have that kind of money to throw around - it would have been a significant portion of my net worth.â€
By 2009, Mr. Smith earned $500,000 a year but his doubts were growing. In the book, Mr. Smith recalls trying to referee disputes between associates over bonuses, only to watch partners frequently decid e based on who they liked more.
“Goldman Sachs teamwork had gone out the window,†Mr. Smith writes.
By 2011, Mr. Smith was writing his cri de coeur on airplanes, in hotel rooms, and late at night, distilling in writing “many of the things that were poisoning the institution I loved.â€
A colleague warns him against publishing it, but Mr. Smith writes, “the moral benefits outweighed the risks. I felt incredibly strongly about this.†On the Saturday night before the piece's publication, Mr. Smith ventured into the office to clean out his desk, pausing for a few bites of a McDonald's Filet-O-Fish.
After a few hours, Mr. Smith departed into the London night, with a backpack and a small box that contained a “decade's worth of memories.â€
“Goldman would later tell me they had surveillance video of me walking out the front lobby with my box and backpack. They thought I had larceny in my heart, when all I had was freedom.â€
A version of this article appeared in print on 10/19/2012, on page B1 of the NewYork edition with the headline: Ex-Trader's Book Offers Few Details On Goldman.
