Goldman Sachs faces £1mn lawsuit over ‘dysfunctional’ workplace claims - LONDON - based on Financial Times

Goldman Sachs work culture under fire, faces £1mn lawsuit over toxic environment 

Goldman refuted the existence of a 'culture of divisiveness' or any unpleasant infighting at the Defendant, both as alleged and in general. The bank also denied the assertion that tears during meetings were a common.

A former executive is taking Goldman Sachs's London office to court in a high-profile £1 million lawsuit, alleging that his role led to mental health issues and describing the bank's workplace as "dysfunctional," characterised by emotionally charged meetings often resulting in tears.

Ian Dodd, aged 55, the former global head of recruiting at Goldman Sachs International, has initiated the lawsuit against the bank in London. He alleged that his position led to mental health challenges due to "working excessive hours," as stated in High Court documents. 

Dodd commenced his role at Goldman Sachs's London office in November 2018 but started experiencing health issues in 2019, eventually departing in 2021.

The lawsuit has emerged in a climate of increased attention on Goldman's work environment, leading the bank to initiate reforms. Last year, Goldman informed its top-tier bankers that they could take unlimited vacation days to ensure they have the opportunity to "rest and recharge."

According to Financial Times, the bank refuted his allegation and contested the lawsuit. A case management hearing was scheduled for December, during which a trial schedule was expected to be established.

Goldman filed a comprehensive defence in the High Court, refuting Dodd's claims. “As with many workplaces, there were occasions when colleagues were upset, for a variety of reasons (sometimes unconnected with work and sometimes connected with work), but it is denied that such instances were frequent or usual”, Goldman’s defence filing reads.

“It is denied that there was a ‘culture of divisiveness’ or unpleasant infighting at the Defendant, whether as alleged or at all. It also denied claims that sobbing through meetings was common,” the filing read further. 

In its legal defence submission to the court, the bank refuted the accusations of "general agitation" among its staff and rejected the notion of a "culture of bullying within the defendant."

In its High Court defense submission, Goldman highlights that Dodd had written to his line manager in November 2018, expressing that while his initial days had been intense, they had "reaffirmed why Goldman Sachs is a wonderful place for me to be right now."

In its defence document, the bank asserts that Dodd "was not obligated to work excessive hours" and further states that Dodd was "given appropriate and reasonable guidance and support." Additionally, the bank denied any knowledge or awareness that the Claimant was experiencing health issues.

So many scandals in London and yet even examples like that one,  biased recruitment and favouritism totally unqualified people in ED positions to manage the most precious for the bank's human resources in the front office, associates and VP far much more skilled than this shameful example:

SEE > TR (UK forum) title > Goldman Sachs: How To Get ED Executive Director @Global Markets(Sales&Trade) Front Office?Total Non-Target Play HR D&I Game...It Worked (Real 2022case)...

Goldman's London office hasn't had the best luck in recent years, as you may recall, with recent scandals such as these:

Greg Smith, the former Goldman Sachs employee who infamously quit Wall Street via a New York Times article in March, says the investment bank routinely took advantage of charities and pension funds in order to increase its profits.

In an interview on CBS News' 60 Minutes on Sunday to promote the release of his book called Why I Left Goldman Sachs: A Wall Street Story, Smith said that securing an unsophisticated, or "muppet" client was the top goal of the bank's salespeople. His frustrations with that culture meant he "literally wanted to hit the board of directors over the head".

"Getting an unsophisticated client was the golden prize," he told the programme. "The quickest way to make money on Wall Street is to take the most sophisticated product and try to sell it to the least sophisticated client.

"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 (£1.2m) or $3m because of their lack of sophistication."

Smith was no more than a mid-ranking employee when he penned his March article, which is best remembered for his claim that Goldman bankers in London frequently dubbed unsophisticated clients as "muppets".

"Within week one [of arriving in the London office] I met a junior guy who was 24, 25 years old and the first thing he'd told me was that he had just traded a sophisticated derivative with a 'muppet client' who'd paid the firm an extra million dollars because the client was so trusting that he didn't check the price with other banks," Smith recalled. "Now you could think to yourself, is this some rogue guy who is just talking callously about clients, but his boss who's a managing director was sitting right next to him nodding and chuckling along."

Smith also recalled how he and a Goldman partner travelled to Asia to meet a major client, described as the "head of one of the biggest funds in the world".

"The Client looks me and the partner in the eye and says: 'Let me be honest with you guys. We don't trust you at all. But don't worry, there's nothing to worry about, we're going to keep doing business with you because you're the biggest bank, you're the smartest and factually we have to do business with you'.

"Now my jaw almost dropped because hearing from one of your biggest clients that they don't trust you when your whole mantra and reputation is built on trust, to me was the worst possible thing that you can hear. And then I leave the meeting and the partner from Goldman Sachs, who I was with, is jubilant. This is great news. The client is going to keep doing business with us because they have to."

Goldman declined to give CBS a response to its Smith interview. However, the bank's board has already been told that an internal investigation triggered by Smith's resignation – which was dubbed the "muppet hunt" – had found little substance to the allegations.

The bank has also been briefing that Smith had been angling for a promotion and for the bank to double his pay to $1m, although Smith claims he would have quit even if his pitch had been successful.

"What I can say to you, and this may sound stupid, is that I didn't go to Wall Street purely to make lots of money," he said. "I definitely wanted to make money, but I left because things had veered so far from what I actually believed was right. I could have just left and walked out and said nothing about it but I would have felt that that was not the right thing to do."

Along with several other major Wall Street banks, Goldman has been widely criticised for making money at the expense of clients who did not fully understand the complex financial products they were dealing with.

In 2010 Goldman was fined $550m as part of a settlement with the Securities and Exchange Commission – the largest in the US regulator's history – when the bank accepted that the marketing materials it issued to investors for its infamous Abacus transaction gave "incomplete information".

The Abacus case had called into question the integrity of Wall Street after the commission alleged Goldman had packaged up mortgages into Abacus and then sold them to investors without telling them that one of its powerful clients, the hedge fund Paulson, had been taking a trading position intended to profit from a fall in the value of US house prices and had even selected some of the mortgages included in the product.

 

Distinctio quia ab asperiores atque facilis. Optio qui dolores odio aut. Alias ut dolore deleniti voluptatem vitae.

Quas sit eius repellat commodi deleniti. Adipisci vel architecto labore sed tenetur. Est dolor illum asperiores ab ut illum architecto. Veniam laboriosam sunt sint consequuntur illum dolores. Corrupti omnis hic dolores qui beatae quia.

Eius laborum cumque reiciendis est. Ut quo doloribus asperiores. Perspiciatis necessitatibus consectetur odit nihil voluptatem dolorum. Animi et velit facilis sunt voluptatem. Laudantium praesentium odio error nulla animi nesciunt aspernatur. Quasi voluptatem officiis qui temporibus veniam omnis nisi. Neque eveniet ipsum rerum voluptates et.

I'm an AI bot trained on the most helpful WSO content across 17+ years.

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (87) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
dosk17's picture
dosk17
98.9
6
GameTheory's picture
GameTheory
98.9
7
CompBanker's picture
CompBanker
98.9
8
kanon's picture
kanon
98.9
9
bolo up's picture
bolo up
98.8
10
numi's picture
numi
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”