Anderson Cooper: You heard people you work with talk about overcharging clients, bragging about it?
Greg Smith: Within week one, I met a junior guy who was 24 or 25 years old and the first thing he told me was he'd just traded a sophisticated derivative with a Muppet client who paid the firm an extra million dollars because the client was so trusting that he didn't check the price with other banks. Now you could think to yourself, "Is this some rogue guy who's just talking callously about clients?" But his boss, who's a managing director, was sitting right next to him nodding and chuckling along. And--
Anderson Cooper: The boss was laughing about it?
Greg Smith: Absolutely. They were both laughing about it.
Off camera, Goldman executives told us they conducted an investigation after Smith's article came out and found no evidence of wrongdoing. The firm did show us one London email in which clients were referred to as Muppets, but pointed out there was no mention of ripping those Muppets off.
Anderson Cooper: Something that Goldman says is, "Look"-- they have-- there are procedures in place where if you have concerns, you can raise a red flag and you can even do it confidentially. And yet, they say you didn't do that.
Greg Smith: Well, I spoke to nine senior partners of the firm, people who had been partners since 2004. If anyone at Goldman Sachs says, "We were surprised by this," they shouldn't have been.
Anderson Cooper: Goldman says that you wanted a million dollars in compensation, that you wanted a promotion and you later learned that you were not going to get that and that's what's behind this.
Greg Smith: I think that would be a criticism I would expect to hear from Goldman Sachs.
Anderson Cooper: Had they given you a promotion, had they given you a million dollars in compensation, would you still have quit?
Greg Smith: Absolutely.
Anderson Cooper: I think a lotta people would find that hard to believe.
Greg Smith: Well, well, what I can say to you is-- and, this may seem stupid, but I didn't go to Wall Street purely to make lots of money.
Anderson Cooper: But I don't know anybody who's ever gone to Wall Street w-- and not had the idea of making money--
Greg Smith: Oh, no, I definitely wanted to make money. But I left because things had veered so far from what I actually believed was right that I could have just left and walked out and said nothing about it. But I would have felt that was not the right thing to do.
Anderson Cooper: [to Partnoy] How do you think what he's saying is going to be viewed on Wall Street?
Frank Partnoy: I think people at Goldman Sachs will breathe a huge sigh of relief.
Anderson Cooper: Relief?
Frank Partnoy: I think they'll read this book and they'll say, "I thought there were going to be significant allegations of fraud and there aren't."
Anderson Cooper: I guess one of the most troubling things that Smith is saying is that large pension funds, philanthropic institutions, they're being sold very complicated financial products that they don't even understand. Is that true?
Frank Partnoy: It is true. And it's a real problem right now, particularly in an environment where interest rates are so low. And these institutions call a Wall Street bank and say, "We need something that will juice up our return, we need to make more money." And they're vulnerable when they do that.
Now that his book "Why I left Goldman Sachs" is finished, Smith told us he's not sure exactly what he'll do next.
Anderson Cooper: Why would any Wall Street bank in the future ever hire you?
Greg Smith: I was not doing this in order to get hired at another Wall Street bank. I really thought this through and thought it would be a constructive thing to do. And while Wall Street doesn't like to be criticized, I think the criticism is warranted.