"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." "Within week one 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. 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". 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." "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'. "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. "Getting an unsophisticated client was the golden prize," he told the programme.
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