Goldman conducts company-wide email review: sources

Goldman Sachs Group Inc has begun scanning internal emails for the term “muppet” and other evidence that employees referred to clients in derogatory ways, Chief Executive Lloyd Blankfein told partners in a conference call this week, according to people familiar with the call.

The company-wide email review comes after an executive director named Greg Smith resigned last week in a scathing op-ed column in the New York Times in which he said he saw five Goldman managing directors refer to clients as “muppets,” at times over internal email.

In the United States, “muppet” brings to mind lovable puppets such as Kermit the Frog, but in Britain “muppet” is slang for a stupid person.

On the conference call with partners this week, Blankfein said the company was taking Smith’s claims seriously and was conducting a review of his assertions, including the email scan, according to these people.

The bank declined to comment.

It was not clear when the search would be completed or what actions, if any, Goldman would take if the search turns up derogatory comments.

In an internal memo distributed last week, Blankfein and Cohn said Smith’s assertions did not represent the values or culture they try to instill at Goldman, and that they would examine Smith’s issues “carefully.”

In his op-ed, Smith said Goldman’s culture had changed from one that “revolved around teamwork, integrity, a spirit of humility and always doing right by our clients” to one where mistreating clients for profit had become standard, creating a “toxic and destructive” environment. He blamed Blankfein and President Gary Cohn for fostering the supposed changes he described.

Typically, when Goldman employees have an issue with co-workers or processes such as the ones Smith described, they can take concerns to a supervisor or report them anonymously to human resources. Because Smith is no longer at the company and his resignation op-ed did not specify circumstances or people, Goldman has been conducting a broad review to determine whether his assertions are accurate.

Smith’s op-ed was highly unusual because Goldman employees shy away from publicly criticizing the bank, both because it breaks the Goldman code of silence and because of non-disparagement agreements many employees sign that bar them from speaking negatively about the bank.