Ex-banker speaks out against Goldman Sachs

Greg Smith, who publicly resigned in scathing op-ed, says investment bank's unethical culture threatens firm's future

When Greg Smith resigned from Goldman Sachs by writing a critical article on the op-ed page of The New York Times, he says he wasn't betraying the firm that employed him for 12 years. Rather, he tells Anderson Cooper, he wanted to help by exposing problems that put the firm's future at risk. The interview with Smith, his first since his headline-making resignation last spring, will be broadcast on 60 Minutes on Sunday, Oct. 21 at 7:30 p.m. ET and 7:00 p.m. PT.

"I literally wanted to hit the board of directors over the head, and say, 'Listen, I was proud of Goldman Sachs. I worked here for a long time,'" Smith tells Cooper. "So an op-ed resignation....you hoped it would be a wake-up call?" Cooper asks. "I really did," Smith says. "Because there are a lot of people who acknowledge things internally, but no one is willing to say it publicly. And my view was the only way, you force people to change the system, is by saying something publicly."

Pressed by Cooper that such a dramatic resignation would feel like a betrayal to his former colleagues, Smith replies, "You know, this might be hard for people at Goldman Sachs to understand, but I loved the place. I put a lot of my heart and soul into it. I don't view it as a betrayal. I actually think the leaders of Goldman Sachs today don't have the long-run interests of the institution at heart."

He pointed to one incident in the firm's London office that he says characterizes a problem with the firm's corporate culture that he says needs to be addressed: "I met a junior guy who was 24 or 25 years old and the first thing he told me was he'd just traded a sophisticated derivative with a Muppet client who paid the firm an extra million dollars because the client was so trusting that he didn't check the price with other banks. Now you could think to yourself, 'Is this some rogue guy who's just talking callously about clients?' But his boss, who's a managing director, was sitting right next to him nodding and chuckling along," recounts Smith. "Muppet" is a slang term that Smith says was repeatedly used in the London office to refer to clients as fools or idiots.

At the time he left Goldman Sachs, Greg Smith was 33 years old and making roughly half a million dollars a year as a vice-president, a mid-level position in the division of Goldman Sachs that trades securities for hedge funds, pension funds, and other big investors. Smith has written a book, "Why I Left Goldman Sachs," that will be out in stores next week.

Goldman Sachs would not give 60 Minutes an on-camera interview, but off-camera Goldman executives said the real reason they believe Smith left the firm was because he didn't get the promotion and compensation he wanted. Goldman also says that it investigated the charges Smith made in his article and found no evidence of wrongdoing within the firm.