Shares of Goldman Sachs Group Inc. (
) on Thursday recovered nearly all losses sustained a day
earlier, when a disgruntled former executive quit with an angry
parting shot published in the New York Times.
At the close the shares were at $123.06, up $2.69, or 2.2
percent, valuing the financial services giant at $60.9
Before Wednesday's diatribe by Greg Smith, a 12-year Goldman
employee who was based in the firm's London office, the U.S.
Federal Reserve announced that Goldman had passed a critical
"stress test" of its balance sheet.
Shares fell 3.4 percent Wednesday, wiping out $2.15 billion in
value, following the publication on the Times' opinion page of an
essay in which Smith lamented the "decline in the firm's moral
fiber" and said Goldman traders and directors have little regard
for clients' interests.
Goldman issued a statement denying Smith's claims. Its chief
executive, Lloyd Blankfein, and president, Gary Cohn, sent
employees a memo in which they expressed disappointment over
Smith's essay while saying his claims "do not reflect our values,
our culture and how the vast majority of people" at Goldman think
about their work.
Smith's column and resignation provoked global interest and
comment, especially after several recent events involving his
former employer. These include, among other lapses, the reporting
by Goldman of its first quarterly loss since going public in 1999
and a $550 million payment to the U.S. Securities and Exchange
Commission in 2010 for structuring a complex mortgage product
that was designed to fail.
Also, Goldman Sachs received part of the 2008 one-time $700
billion bank bailout orchestrated by the administration of
President George W. Bush. Bush's treasury secretary, Henry
Paulson, had been Goldman's CEO. Later, Blankfein and other
executives were required to testify before congressional
committees about their role in the mortgage crisis and financial
The Financial Times noted Thursday that Goldman's traditional
code of silence had collapsed. "More bankers are now prepared to
speak, at least privately, about their worries that life at the
bank will not be as lucrative or as fun as it was in the past,"
the U.K. newspaper observed.
Moreover, the paper commented, Smith's column raises questions
"whether the problems run deeper and whether it is time for Mr.
Blankfein to retire."