On Wall Street, loyalty runs deep.
As the fallout over Greg Smith’s public resignation continues to swirl around Goldman Sachs, several powerful figures have rallied to the bank’s defense, including New York Mayor Michael Bloomberg — who made his fortune supplying data terminals to Wall Street — and Morgan Stanley CEO James Gorman. Even as Goldman faces a torrent of negative publicity — as well as the ire of a resurgent Occupy Wall Street movement — it’s clear that the powerful bank still has many friends in high places.
Bloomberg stopped by Goldman’s lower-Manhattan headquarters to offer his support, shaking hands on the trading floor and sharing burgers with CEO Lloyd Blankfein, according to The New York Times. The mayor’s visit came just days after Smith, a 32-year-old executive director for Goldman’s equity derivatives business, published a scathing resignation letter in The Times, accusing the bank of putting profits before the best interests of its clients. Smith, who worked in Goldman’s London office, has not commented publicly since he resigned.
For Bloomberg, loyalty to Goldman Sachs — and the financial services industry in general — runs deep. He spent nearly a decade early in his career at famed investment bank Salomon Brothers. Later, he made billions supplying now-iconic Bloomberg data terminals to Wall Street banks, helping to lead a technological revolution in the financial services industry.
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But even without those ties, as mayor of New York City, it might as well be in Bloomberg’s job description to support what is arguably the most important firm in the city’s most important sector — one that generates billions of dollars in tax revenue every year for the city. “It’s my job to stand up and support companies that are here in this city that bring us a tax base and that employ our people,” Bloomberg said on his weekly radio show Friday. He called Goldman “a great firm,” and criticized the very public manner in which Smith resigned as bad form.
“I thought (it was) a nasty letter from an employee,” Bloomberg said. “You know, you go to work for a company, it seems to me they have an obligation to never diss you. They can part company with you. But they should never do that.”
Other Wall Street heavy-hitters also stepped up to defend Goldman, including Morgan Stanley CEO James Gorman. Speaking at a breakfast hosted by Fortune, Gorman said he told his employees not to circulate Smith’s op-ed. “I didn’t think it was fair,” Gorman said of Smith’s letter, according to The Wall Street Journal. “I don’t really care what one employee said,” Gorman said. “At any point, someone is unhappy… To pick a random employee, I don’t think it’s fair. I don’t think its balanced.”
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J.P. Morgan CEO Jamie Dimon also told his firm not to circulate Smith’s op-ed, so as not to “take advantage” of the situation. “We respect our competitors, and our focus should be on doing the best we can to continually strengthen our own standards,” Dimon wrote in a memo to his employees.
Meanwhile, in a sign that anger toward Wall Street remains a potent force in the national conversation about income inequality, hundreds of protestors converged on New York’s Zuccotti to mark the six-month anniversary of Occupy Wall Street, only to be ejected by the police hours later. Some of the demonstrators even sought to make common cause with Smith. “I kind of like to think that the Occupy movement helped him to say, ‘Yeah, I really can’t do this anymore,’” retired librarian Connie Bartusis told the Associated Press.