Goldman Sachs execs quickly sold off shares during the financial crisis

The whole story is contained in little-noticed public records filed with the Securities and Exchange commission — see here and here — which make enjoyable reading after spending the last year listening to the gang at Goldman and other firms whine about the terms of the Tarp program and repeatedly insist that they weren’t really in all that much trouble. Because if these savvy Goldman guys were freaking out and selling large chunks of stock in the dark days of 2008, that makes it a safe bet things were plenty bad and getting worse.

Among those executives who sold chunks of Goldman stock after the Bear Stearns debacle was Jack Levy, the co-chairman of Goldman’s mergers and acquisitions department (disclosure: he was briefly my boss when I worked in M.&A. at Merrill Lynch in the 1990s). On March 19, 2008, two days after Bear’s collapse, Levy sold 30,000 Goldman shares, at $171.32 each, generating $5.14 million. Levy also “wrote” — or sold — 60,000 October 2008 calls on Goldman stock in the market to an investor, or investors, who bet Goldman’s stock would reach $230 per share by then. Levy pocketed the premium on the calls — and of course this was a smart bet, since Goldman’s stock was trading around $90 a share by October 2008.

Also among the big sellers in March 2008 was E. Gerald Corrigan, a Goldman managing director and former head of the New York Fed, who sold 15,000 shares of Goldman for $2.6 million; Jon Winkelried, Goldman’s co-president at the time, who sold 20,000 shares for nearly $3.5 million (he quit the firm a year later after asking it to buy an additional $19.7 million of his illiquid investments); and Masanori Mochida, the head of Goldman in Japan, who sold 100,000 shares for $17.6 million.

Marc Spilker, who just resigned as head of Goldman’s asset management division, sold 11,484 shares for $2 million. David Solomon, a former Bear banker who joined Goldman in 1999 and now is co-head of investment banking, sold 8,072 of his Goldman shares at $175.89, generating just more than $1.4 million in proceeds. (He seems to have had a change of heart: On March 24, 2009, he bought 4,202 shares for $183 each, or $767,000.)


Read the whole story: nytimes.com