Greg Smith.
Greg Smith created a headache for Goldman Sachs last year when he resigned from the firm through a harshly worded Op-Ed article in the pages of The New York Times.
Now it appears that Mr. Smith is back on Wall Street’s case. But this time, he’s helping regulators draft rules intended to rein in risky trading.
Mr. Smith met with officials at the Securities and Exchange Commission in August to talk about the Volcker Rule, a regulation stemming from the Dodd-Frank financial overhaul that would limit banks’ ability to trade for their own accounts. The meeting was first reported Tuesday evening by Politico.
Armed with a five-point agenda, Mr. Smith advised the regulators not to trust Wall Street’s claim that the Volcker Rule would cause liquidity to dry up, according to an S.E.C. memo. He also emphasized the importance of regulating certain arcane financial products “where the vast majority of money gets made in the trading business.”
Mr. Smith’s agenda touched on some of the central debates surrounding the regulation, like the difference between “market making” — when a bank facilitates trading by customers — and proprietary trading, or trading that puts the bank’s own capital at risk.
But it also suggested a possible second act for Mr. Smith, who wrote a book last year after his Times essay made him briefly the talk of Wall Street. Mr. Smith gave media interviews after the publication of the book — “Why I Left Goldman Sachs: A Wall Street Story” — discussing what he saw as a culture of greed with little regard for clients.
Word of his meeting with the S.E.C. caused an online stir on Wednesday.
Matt Levine, a former Goldman employee who writes for Bloomberg View, had this comment: “Who better to tell you how to write the Volcker Rule than a disgruntled former midlevel derivatives salesman? Lots of people, probably!”
“Former Goldman Sachs Ping-Pong Star Is Keeping Busy,” read the headline on Mr. Levine’s post, a nod to Mr. Smith’s table tennis prowess.
The news also lit up Twitter, where the wise cracks were plentiful: