Goldman Sachs executives—from left, Daniel Sparks, former partner and head of the mortgage department; Michael J. Swenson, managing director, structured products group trading; Joshua S. Birnbaum, former managing director, structured products group trading; Fabrice Tourre, executive director, structured products group trading—are sworn in Tuesday prior to testifying before the Senate Investigations subcommittee hearing on Wall Street investment banks and the financial crisis.
Tuesday was not a fun day to be a top executive at Goldman Sachs. Sen. Carl Levin and his posse from the Permanent Subcommittee on Investigations made sure of that during a lengthy interrogation session, which included quite a zinger from Sen. Levin to Daniel Sparks, who used to run Goldman’s mortgage department. Meanwhile, the company’s stock rose a dollar and a penny. —KA
“How about the fact that you sold hundreds of millions of that deal after your people knew it was a shitty deal?” the Michigan Democrat asked Daniel Sparks, who ran the bank’s mortgage unit at the time. “Does that bother you at all?”
... In his comments to Sparks, Levin was referring to a June 2007 e-mail to Sparks from Thomas Montag, the former head of sales and trading in the Americas at Goldman Sachs. The message described a set of mortgage-linked investments that his bank had been trying to sell as part of “one shitty deal.”
“I don’t recall selling hundreds of millions of that deal after that,” Sparks replied, adding that he believed the e-mail referred to his performance, not the security itself.
“If you can’t give a clear answer to that one, Mr. Sparks, I don’t think we’re going to get too many clear answers from you,” Levin said.
As the executives testified, Goldman Sachs was the only stock among 79 financial companies that gained in the Standard & Poor’s 500 Index. The stock rose $1.01 to $153.04 as of 5:04 p.m. in New York Stock Exchange composite trading.