Ex-Goldman Partner Jacki Zehner: Subprime Crisis Shows Wall Street Harmed Its 'Moral Fiber'

Another former Goldman Sachs employee has come forward to give her two cents on what has changed on Wall Street and at the firm.

Jacki Zehner, the first female trader to be promoted to partner, wrote a post on her blog about the cultural changes that took place during her 12-year career at the firm and more generally on Wall Street. Zehner pays particular attention to the subprime mortgage bond crisis, which she says is indicative of an industry that has "lost its way."

"When you create toxic waste and market it as if it is was not, you are indeed harming your moral fiber," she wrote.

But even before the mortgage mess, Zehner says that Goldman was already losing sight of the environment for which it had once been so famous.

"The Goldman Sachs I joined in 1988 was not the same one I left in 2002 from a culture perspective," she wrote. "I cannot tell you the number of times I have heard ‘Goldman is not the place it was’ and that truly breaks my heart."

Zehner's post was, of course, a response to Greg Smith's op-ed in The New York Times last week in which the former Goldman worker resigned and accused the firm of promoting a "toxic" environment and valuing profit above all else -- particularly customers.

"I will tell you from personal experience that the vast majority of people I worked with cared deeply about our customers, and, if you were heard calling customers any of the things Mr. Smith mentioned, you would be in big trouble. BIG," she wrote in her post.

But Zehner, who left Goldman in 2002, goes on to say: "That was 12 years ago. The questions now are: has the business changed and has the firm changed? I think the answer to both is yes."

Zehner is one of many current and former financial industry players jumping at the opportunity to discuss cultural changes on Wall Street and at Goldman Sachs since Smith’s op-ed rocked the business world last week. Former Federal Reserve Chairman Paul Volcker, ex-AIG CEO Hank Greenberg and the heir of one of the founders of Goldman Sachs all spoke out last week saying that the firm had changed for the worse.

Zehner cites shifts in the way Wall Street functions, including that banks are now taking bigger proprietary positions than ever before, which has the potential for conflicts of interest is clients also serve as competitors. In addition, Zehner says that customers are generally much bigger than they used to be and do bigger trades -- a situation that can often lead to confusion over who the client really is.