| NEW YORK
NEW YORK Oct 21 The tell-all book that Goldman
Sachs Group Inc former equity derivatives salesman Greg
Smith has delivered may end up being remembered more for the
marketing skills he picked up at the Wall Street bank than for
any bombshell revelations.
Smith created a furor earlier this year when he resigned
from the blue chip Wall Street firm, alleging 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 a book about the bank, building up
expectations of an exposé with new insights about the culture at
Goldman. The threat 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
Smith reportedly received $1.5 million as an upfront payment
for the book, which is being published by Grand Central
Publishing, a unit of Hachette. He has lined up a series of
interviews, including one with Reuters, to talk about the book
"Why I left Goldman Sachs", which will be released on Monday.
Early reviews of Smith's 288-page book are now in, and they
aren't good. Reviewers, who received copies of the full book,
have panned it for being a sleepy read with no big revelations
-- or worse, misleading.
The tawdriest revelations are about a bachelor party in Las
Vegas with a topless woman, and Smith having seen Lloyd
Blankfein, Goldman's chief executive, in the buff after
showering at the gym.
"There were no examples of a toxic culture at work, no
actual names of morally bankrupt people and no examples of a
client getting ripped off," wrote James Stewart, himself the
author of top selling business books such as Den of Thieves, in
his column in the New York Times.
"Mr. Smith's book might even bolster Goldman's reputation.
After all, if Mr. Smith is the ultimate insider, and this is as
bad as it gets - Mr. Smith in a hot tub at the Mandalay Bay
Hotel in Las Vegas with a topless woman - then he hasn't made
much of a case," said Stewart.
Stewart also cast doubt on some of the anecdotes Smith tells
in his story, interviewing people who were in his internship
class, such as Teddy Schwarzman, son of Blackstone Group LP
CEO Stephen Schwarzman. Schwarzman and others say the
incidents Smith described, such as an intern running out of a
room crying after being humiliated by a more senior Goldman
executive, never happened.
Other early reviews have also been critical. The financial
blog Dealbreaker mocked less-than-revelatory anecdotes in
Smith's book, including one in which a managing director threw
out a "cheddar cheese salad" that an intern had brought him for
lunch, instead of the cheese sandwich he had asked for. That
anecdote led to more jokes on Twitter and other financial blogs
about what, exactly, a cheddar cheese salad is.
Smith's publicist, Jimmy Franco, did not respond to a
request for comment for this article.
Smith's ability to so easily build up buzz about his book
over the past few months shows how difficult it has been for
Goldman to try to counter perceptions that it is the poster
child for all that's wrong on Wall Street.
In 2010, the U.S. Securities and Exchange Commission
accused the bank of betting against clients on a mortgage trade,
charges that were later settled, but nevertheless led to a
firestorm of criticism. One of its former traders, Fabrice
Tourre, is due in court next summer to face civil charges for
his involvement in those events.
Smith's allegations had raised the same questions about
Goldman's culture and ethics all over again.
For its part, Goldman has characterized Smith as a
disgruntled and mediocre employee who stirred up all this
attention because he did not get the raise and promotion he
wanted. Smith spent 12 years at the investment bank. By the time
of his resignation, he was a vice president, earning about
$500,000 a year, Goldman said.
Goldman has said that it looked into Smith's assertions and
did not find any evidence of employees misbehaving or treating
clients poorly. Blankfein told CNBC recently that the firm "went
over everything like crazy and, frankly, we could find nothing."
The marketing strategy for the book shines a spotlight on
tactics used by publishers and authors to drum up sales for
upcoming publications - and the problems that it can create when
the book in question fails to deliver.
It appears to be "a typical example of overpromising and
under-delivering," said George Belch, chair of the marketing
department at San Diego State University and an expert on
consumer behavior, who noted that he has not yet read the book.
"What they do is try to drum up publicity and whet the
public appetite, and clearly Goldman Sachs, for certain portions
of the population, is intriguing. But that doesn't mean the book
will do anything more than reinforce your disdain for the
industry if you already feel that way."
Smith's failure to meet expectations also raises
uncomfortable questions for the Times, which first published his
allegations in an op-ed column.
On Friday morning, New York Times business columnist Andrew
Ross Sorkin said on CNBC he thought the newspaper might have
been "duped" by Smith into publishing the op-ed in the first
place, given the lack of substantial information in the book.
A Times spokeswoman declined to comment.
Smith, who vanished from the public spotlight after his
Times op-ed appeared in March, will make his first television
appearance on Sunday evening, on the CBS show "60 Minutes."
A clip of the show released on Friday has him recounting an
incident in which he says a 24- or 25-year-old junior salesman
calls a client a "muppet" after charging the client an
additional $1 million for a trade.
"Now you could think to yourself, 'Is this some rogue guy
who's just talking callously about clients?'" Smith told CBS.
"But his boss, who's a managing director, was sitting right next
to him nodding and chuckling along."
In the interview, Smith wears a dark blue suit, white shirt
and red tie, talking for the first time to the public in his
native South African accent.
Smith told CBS he does not think he betrayed Goldman and
that he has gone on this public campaign to try to affect change
at a firm he was once proud of.
Belch, the marketing professor, said that by publicly
slamming the firm, Smith might have done more harm than good,
since the book appears to have little new information.
"Here's another book about how we got taken to the cleaners
by the financial services industry," said Belch. "Well, yeah,
what a shock. Most people don't want to spend money to read