Goldman Sachs exec exposes rip-off of Teacher Retirement Fund

Wall St. (N.Y. Times)

Greg Smith's book, "Why I Left Goldman Sachs," is being released Monday. It's a window into the culture of Wall Street and a company that routinely ripped-off clients, including teacher retirement funds. Smith was so disgusted with his firm, Goldman Sachs, that he quit via an open letter in the New York Times  in which he says:

"It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail."

The term refers to clients, including teacher retirement fund managers, who were easily persuaded to invest fund dollars into poor performing stocks the Wall Street-ers where anxious to dump. The funds lost millions and now teachers are being forced to pay the price with cuts in their hard earned benefits.

In an interview on CBS News' 60 Minutes on Sunday to promote the release of his book Smith says:

"What Wall Street will do is they will approach one of these philanthropies or endowments or teachers' retirement pension funds in Alabama or Virginia or Oregon and they'll say to them: 'We have this great product that is going to serve your needs'. And it looks very alluring to these investors but what they don't realise is that upfront they are immediately paying the bank $2m or $3m because of their lack of sophistication."