Leading wealth manager Ron Carson says The Goldman Sachs Group Inc. recently made him understand how it felt to be treated like a Muppet. No, not the Oscar-the-Grouch kind of Muppet, but the British-slang kind of Muppet, or “idiot.”
Mr. Carson's description of his recent encounter with Goldman Sachs jibed closely with company defector Greg Smith's description of how Goldman treats clients. As you recall, Mr. Smith, an executive director at the white-shoe firm, quit Goldman in March and immediately published a blistering opinion piece about the global investment bank in The New York Times.
Among the derogatory details about Goldman's culture, according to Mr. Smith, was that its managing directors routinely called clients “Muppets,” a term of derision commonly used in the U.K.
Mr. Carson, chief executive of Carson Wealth Management, had discussions in early April with a team at Goldman to evaluate a potential private investment. “We were doing due diligence on an investment, and Goldman Sachs put out a report on it,” Mr. Carson said in an interview in Orlando, Fla., Thursday, while taking a break from the spring Peak Advisors Excell meeting he hosted.
According to Mr. Carson, during a conference call about the pre-IPO investment, the details of which Mr. Carson declined to specify, one of the Carson team members questioned a Goldman analyst's math as to the deal's appropriate valuation.
“They had made some mistakes, and my guy had uncovered them and said that their valuations were wrong, and they were off and here's why,” Mr. Carson said. “My director of research just pissed [a Goldman analyst] off.”
Mr. Carson said: “The [analyst] at Goldman, a 17-year veteran, said, 'When we do a road show, nobody really looks at this stuff very deeply. They really don't dig that deep into these numbers.'”
The Carson team was stunned by the supposed comment. “There were several of us on the call, and we just looked at each other, like we couldn't believe he just said that. I couldn't help myself, and said: ‘What if the [Carson analysts] are not Muppet-like?'”
The proposed transaction was the first such deal Carson Wealth Management and Goldman had discussed. “It reinforced to me how screwed up, and how conflicted” Wall Street can be, he said.
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When asked about Carson's comments, Goldman Sachs spokesman Michael DuVally said: “Without knowing the name of the alleged Goldman Sachs employee, it's difficult for me to comment.”
Ultimately, Carson Wealth Management did not proceed with the transaction for its clients. “Goldman was trying to justify a valuation on the pre-IPO transaction that was three-and-a-half times higher than what we had,” Mr Carson said. “I think it just reinforces how the Wall Street machine, if it can take advantage of anybody, they're going to.”
In fact, the wealth manager said his firm is considering taking sides with this new kind of Muppet. “We've been thinking about writing a book for consumers."
The title? “The Muppets Strike Back.”
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