JOHANNESBURG (Reuters) - The former Goldman Sachs Group Inc (GS.N) vice president who publicly accused the bank of taking advantage of unsuspecting clients said he never intended his book to be an expose of practices at the Wall Street firm.
Preliminary reviews of Greg Smith’s “Why I Left Goldman Sachs,” which hits bookstores on Monday, have been lackluster. Critics say the book contains few revelations, given that it had been hyped as a “tell all” look at the investment bank.
Smith, a native of South Africa, told Reuters in a phone interview on Sunday that his book was not meant to be a manual for change on Wall Street. Instead, he said he wanted to shine a light on what was wrong in investment banking and how ordinary people - not the super-wealthy - pay for it.
“People are looking for something sensationalist and expose-like,” said Smith, who sold equity derivatives at Goldman. “I would like people to look at it in a thoughtful manner, with an objective sense that Wall Street has do to things that are right.
“I didn’t write this book for Wall Street, I just wanted to give the Main Street people a window into what goes on, so they could make their own judgment.”
Smith created a furor earlier this year when he resigned from Goldman, saying in a New York Times op-ed column that the firm had engendered a “toxic” culture of treating clients as “muppets” - slang in Britain for idiots - and relieving them of their money.
Smith then promised the book about the bank, building up expectations of new insights about the culture at Goldman.
Grand Central Publishing, a unit of Hachette, planned a print run of 150,000 copies for the book. That is considered a relatively big number for a first run, although many will also be sold through e-book formats.
The publisher declined to say how much it had paid Smith for the book, but media reports said he had received $1.5 million as an upfront payment.
Smith’s op-ed piece and his plans to write a book prompted a public relations campaign and internal inquiries at the bank, as it tried to avoid another hit to its image after suffering a barrage of bad publicity in recent years.
“The Goldman Sachs Mr. Smith describes is not one our employees would recognize,” a spokesman for the firm said on Sunday. “Mr. Smith has asked for answers, yet he did not respond to our repeated attempts to contact him after his abrupt departure earlier this year.”
Goldman has said it looked into Smith’s allegations - including the use of “muppet” in emails - and turned up little. The bank says that unless Smith provides specific examples, it cannot check what he is alleging.
Although “Why I Left Goldman Sachs” does not reveal a new scandal at the firm, Smith said he believed his book shines a spotlight on a worsening culture of greed on Wall Street.
Smith, who worked for Goldman in London, said the company would overcharge customers, such as charities or funds managing the pensions of teachers and firemen, or sell them products they did not need and did not understand.
In some cases, Smith said, traders would use knowledge of the clients’ business to make easy bets against them.
“When you’re trying to make an extra $2 million off a teachers’ retirement fund, it doesn’t jive at least with the values that I felt,” he said. “There is no criminal activity because it’s legal. But it should not be allowed, because it’s unethical.”
Smith, who quit his $500,000-a-year job at the bank, said he would do more to push for change in finance.
“I am in a rush to spread a message and get mainstream people to realize there is a big problem and to be outraged that no one fixed it,” Smith said.
“There is a real absence of people within the financial industry trying to advocate for positive reform,” he said. “I would like to try to be part of that conversation.”
Additional reporting by Lauren Tara LaCapra in New York; Editing by Paritosh Bansal and Lisa Von Ahn