Mortgage Desk Head Leaving Goldman Sachs
Goldman Sachs mortgage chief Dan Sparks resigned from the bank where he played a key role in last year's record profits.
Sparks worked 19 years at Goldman but headed the mortgage department for just a year and a half. His departure was unexpected, according to The Wall Street Journal. Citing an unnamed source, the paper says Sparks gave notice he planned to leave "for personal reasons," and told colleagues he "was fond of the firm but ready to do something different."
His successors are reported to be Justin Gmelich, current head of U.S. credit trading at Goldman, and Thomas Cornacchia, head of credit sales.
Last December, the Journal reported a tiny group of mortgage traders within Goldman had succeeded in convincing the bank to bet heavily on a sub-prime mortgage collapse. Sparks, as head of the desk, had endorsed his traders' strategy, which generated a reported $4 billion in trading profits. Those gains outweighed mortgage losses elsewhere in the firm and handed Goldman a banner year in 2007 while most rivals got creamed.
The Journal gave no indication of Sparks' next move. But Josh Birnbaum, a team member who had pushed Goldman to bet against sub-prime, recently left to start his own hedge fund. Hedge fund fees, much of which end up in the hands of the funds' owners, typically start at 20 percent of profits plus 2 percent of assets. In its story last December, the Journal estimated Goldman would pay Sparks and his traders year-end bonuses in the $5 million to $15 million range.