Goldman's Dan "Shitty Deal" Sparks Sued For Selling “Junk,” “Dogs,” “Big old lemons,” and “Monstrosities”
While the FHFA has targeted lawsuits at a whole bunch of employees of the 17 banks previously disclosed, nothing gives us as much amusement and frankly pleasure, as the fact that Goldman's definition of smugness - one Dan Sparks of "shitty deal" fame, is among the accused. Perhaps, even in uber crony communist America, what goes around eventually comes around. Now, if only someone can figure out how Warren Buffett's Wells Fargo, with its several hundred billion worth of Wachovia toxic biohazard, is not on the list of defendants...
As a reminder:
And some blurbs on Dan Sparks from the filing:
On March 9, 2007, Goldman’s Daniel Sparks wrote: “Our current largest needs are to execute and sell our new issues—CDO’s and RMBS—and to sell our other cash trading positions .... I can’t overstate the importance to the business of selling these positions and new issues.” A leading structured finance expert reportedly called Goldman’s practice “the most cynical use of credit information that I have ever seen,” and compared it to “buying fire insurance on someone else’s house and then committing arson.” Senate PSI Hearing Ex. 4/27- 76. As the Senate PSI found, Goldman “sold RMBS securities to customers at the same time it was shorting the securities and essentially betting that they would lose value.” Senate PSI Report at 513.
That Goldman knew of the originators’ abandonment of applicable underwriting guidelines and of the true nature of the mortgage loans it was securitizing is further evidenced by how Goldman handled its own investments. Goldman internally characterized its offerings as “junk,” “dogs,” “big old lemons,” and “monstrosities.” FCIC Report at 235–36. Nevertheless, it congratulated itself for successfully offloading such “junk” onto others. As the public learned in the FCIC’s Report, by January 2007, “Daniel Sparks, the head of Goldman’s mortgage department, extolled Goldman’s success in reducing its subprime inventory, writing that the team had ‘structured like mad and traveled the world, and worked their tails off to make some lemonade from some big old lemons.” Id. at 236.