Goldman Sachs begins 'muppet hunt' after Greg Smith exit

Mar 23, 2012

Wall Street bank investigates whether its staff has been calling clients 'muppets'

GOLDMAN SACHS is searching its archive of internal emails to see if any members of staff have ever referred to the bank's clients as 'muppets'.

The 'muppet hunt' was revealed by Goldman's CEO Lloyd Blankfein in an apparent attempt to show that the Wall Street bank is taking seriously damaging allegations made by former employee Greg Smith in his infamous resignation letter, which appeared last week as an opinion article in the New York Times.

Singling out Blankfein and company President Gary Cohn for particular criticism, Smith said that the needs of clients were once a priority for the bank but that this was no longer the case.

"It makes me ill how callously people talk about ripping their clients off," he wrote. "Over the last 12 months I have seen five different managing directors refer to their own clients as 'muppets', sometimes over internal email."

Smith had worked at Goldman Sachs for 12 years, most recently at the company's London offices. His letter introduced Americans to the fact that in Britain, the word 'muppet' is used to refer to a clueless person than a puppet in the TV show.

It is unclear so far whether Smith's allegations have had any impact on Goldman's business. But according to The Independent, Blankfein told partners this week that Goldman is conducting a review - including the muppet hunt - to establish whether there is any truth in Smith's assertions.  

Meanwhile, nothing has been heard of from Smith since last week's blindside, although publishers are apparently clamouring to sign him up for an insider's account of life at one of Wall Street's most famous banks. Employment lawyer Alan Sklover said that Smith appears not to be bound by a "non-disparagement" clause as would be the case if he had negotiated his resignation or received a pay-off.

"He won't be able to reveal any client information, or secret planning strategies, anything viewed as valuable, and he will also have to watch out for false statements of fact," says Sklover. "But apart from that, the man is free to speak and to write."

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