It appears that Kermit, Miss Piggy, and Animal can all finally relax, at least for the moment. Financial Times is reporting that Goldman Sachs (GS) has officially called off the great Muppet hunt.
If you recall, this past March Greg Smith, a departing Goldman employee, published an angry missive in the opinion section of The New York Times, blasting the bank’s environment as “toxic” and “destructive.” But perhaps the most stinging criticism — or at least the one the bank and public took the most notice of — was Smith’s charge that the some members of the firm referred to their clients as “muppets.” (Muppet, in British slang, means “an incompetent or foolish person,” a usage that perhaps derives from Jim Henson’s creations being ridiculous figures manipulated by puppeteers.)
It’s Time to Get Things Started on the Muppet Hunt Tonight
In response, Goldman launched an internal investigation into all the charges Smith made, the result being that little evidence was found to support his allegations.
Specifically, of the 4000 references to the word muppet found in millions of employee emails, only one referred to clients as muppets; the rest were all references to the 2011 Muppet movie.
Also of interest: According to the Times, just weeks before he resigned Smith complained about his bonus, saying he deserved to be paid more than $1 million. Smith was a derivatives trader at Goldman, one of the most lucrative positions you can hold at any investment bank.
It’s Not Easy Being Goldman
This was an internal investigation, and even the least cynical among us might suspect that Goldman didn’t exactly go out of its way to prove Smith’s case, and that they were happy to find out–and report –that he was carping about his substantial pay. Even so, this report would probably be the end of the great Goldman Muppet caper if it weren’t for the fact that Smith’s book — Why I Left Goldman Sachs — is about to be published. Goldman is apparently bracing for the worst.
Of all the scandals that have hit the big Wall Street banks over the past four years, this is by far the most fun for the casual observer, if not the most financially instructive. But as scandal after scandal, lawsuit after lawsuit, and bank blowup after bank blowup have rocked the U.S. economy, at least we can sit back and have a laugh over this one.
John Grgurich is a regular contributor to The Motley Fool, and owns no shares of Goldman Sachs. Follow John’s dispatches from the bleeding edge of capitalism on Twitter @TMFGrgurich.
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Media Digest (10/15/2012) Reuters, WSJ, FT, Bloomberg