Goldman Sachs: Did Greg Smith Op-Ed Trigger Internal Email 'Muppet' Hunt?

Goldman Sachs is reportedly planning to conduct a company-wide internal email scan looking for derogatory terms to see if employees are really using derogatory terms like muppet to refer to their clients, a move triggered by last week's scathing op-ed by former employee Greg Smith.

Smith tore into the investment and securities giant for its toxic, destructive and unethical environment after resigning earlier this month.

According to Business Day, sources within Goldman Sachs report chief executive Lloyd Blankfein told partners about the email scan in a conference call earlier this week.

Goldman Sachs has declined to comment on the report. It was not immediately clear when the search would be completed or what actions the firm would take if derogatory comments do turn up in employee emails.

Muppet Land

When most people in America think of the word muppet, they assume someone's about to mention Miss Piggy or Kermit the Frog.

In the UK, however, muppet is slang for an incompetent idiot, and is one of several derogatory words Smith claims high-up Goldman Sachs executives use to refer to their clients.

''It makes me ill how callously people talk about ripping their clients off, Smith wrote in Why I Am Leaving Goldman Sachs, published in the New York Times on March 13. Over the last 12 months I have seen five different managing directors refer to their own clients as 'muppets'.

Smith also described how Goldman Sachs employees were encouraged to convince clients to invest in products the firm was trying to get rid of and to hunt elephants, company slang for getting your clients-- some of whom are sophisticated, and some of whom aren't--to trade whatever is the biggest profit to Goldman Sachs.

Op-Ed Tell-All

Greg Smith's op-ed piece was far from the first time Goldman Sachs has been vilified for alleged crimes ranging from general greed to outright and rampant corruption.

Occupy Wall Street, one of many grassroots movement to target Goldman Sachs, has been focused on the banking and investment firm for months.

Twitter handles like @GSElevator, supposedly run by a Goldman Sachs employee, update multiple times a day with such egregious overheard quotes as 'Women in Business: How much can you write about secretaries? and I'm pretty sure I've been scammed before. I'm just too rich to notice.

Journalists like Matt Taibbi, meanwhile, have described Goldman Sachs for years in such grandiose terms as a great vampire squid wrapped around the the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

But Greg Smith stands out not only for the vehemence of his convictions but for the platform he, as a former employee, chose to air the alleged nasty truth about the firm.

The New York Times is read by almost one million people per day, and has been one of the most highly respected publications in the country for decades.

Smith's status as someone who worked within Goldman Sachs for years, meanwhile, gives his testimony a ring of truth less often found in stories cropped together with anonymous sources and employee soundbites.

Goldman Sachs employees, even if they're miserable at the company, often can't speak ill of the firm while they're employed, simply because of non-disparagement agreements that bar them from doing so. As someone resigning with a vengeance, Smith has apparently escaped that particular clause, and his attack quickly triggered a feeding frenzy around the mega-wealthy firm.

Taibbi recognized the significance of Smith's comments when he hailed them as proof that Wall Street is capable of triggering change from within, as well as supporting his opinion that the Goldmans of the world aren't just arrogant sleazebags, they're also not terribly good at managing your money.

Stock Plunge

All of which could spell big trouble for Goldman Sachs, whose shares plummeted immediately after Smith's revelations, and is one big reason why the firm may be launching 'muppet' hunts with internal email scans.

Blankfein and COO Gary Cohn were quick to respond to Smith's allegations when they first arrived in print, sending out a company-wide memo leaked to ABC last week.

In the memo, they defended the company and its culture by arguing that it was inevitable that such a large company would harbor at least a few disgruntled employees.

Everyone is entitled to his or her opinion, Blankfein and Cohn wrote. But, it is unfortunate that an individual opinion about Goldman Sachs is amplified in a newspaper.

Nonetheless, both men appeared alarmed by Smith's assertions, which they argued did not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does.

Blankfein and Cohn ended their memo by assuring employees that they would look into Smith's allegations carefully, especially the assertion that Goldman Sachs had gone from a place that revolved around teamwork, integrity, a spirit of humility and always doing right by our clients to a toxic and destructive environment where abusing clients for profit was standard procedure.