Smith's opinion, while it created a firestorm of controversy, isn't as important as what Goldman's clients are saying. Despite Smith's claim that executives at the firm commonly called clients "Muppets", some clients are coming to Goldman's defense. (As an aside, I'm sure Kermit, Miss Piggy, Gonzo and crew probably take offense at being compared to investment bank clients.)
For the record, Goldman Sachs quickly denied the allegations and took steps to control the fallout.
Anyway, at least a few Goldman clients who were contacted by CNBC stated that they felt the bank treated them fairly and Smith's comments don't change the way they feel about the investment bank. Then again, if you are a "Muppet" and have been possibly misled be your bank, would you actually go on record and say you have been fooled? Probably not.
Here is the complete clip from CNBC, which includes comments from Mark Lasry, founder of the hedge fund Avenue Capital:
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio