Goldman Sachs sold Litton Loan Servicing LP to Ocwen for $263.7 million in 2011. To gain New York State approval, the firms said they would compensate borrowers whose homes were wrongly foreclosed and make changes to prevent “robo-signing,” where documents are automatically signed without verification.
The bank owned 2.3 million Ocwen shares as of Sept. 30, according to filings that don’t disclose which part of Goldman Sachs holds them. The firm had more than 3 million Ocwen shares before the deal was announced, filings show.
Another MSI proprietary investment was in Monterrey, Mexico-based Cemex SAB, the largest cement maker in the Americas, according to two former members of the Special Situations Group who requested anonymity because they weren’t authorized to speak.
‘Handsome Returns’
MSI doesn’t trade in and out of positions each day, according to alumni, and one said he wished he could have traded more. Still, the team sold most assets after a few months, said Marsh, the former member who’s now at Harvard. Jeanette Cajide, 36, an associate in the Special Situations Group in 2007 and 2008 who now works in development at Dialexa LLC, a Dallas-based technology firm, said she was jealous of MSI’s faster pace.
Goldman Sachs has been wagering its own money for decades. After the firm bought commodities broker J. Aron in 1981, the unit risked the bank’s capital “not in the service of clients but simply to achieve handsome returns,” according to “Goldman Sachs: The Culture of Success” by Lisa Endlich, an ex-employee.
Harvey M. Schwartz, 48, who will succeed Chief Financial Officer David Viniar when he steps down this month and joins the board, began his Goldman Sachs career at J. Aron, as did Blankfein and President Gary D. Cohn.
The firm also used its own capital for risk arbitrage, or betting on takeover targets, under a team led in the 1980s by Robert Rubin, who became Goldman Sachs’s co-chairman and later U.S. Treasury secretary. The group grew into the equities division’s Principal Strategies team. A separate global macro desk speculated on currencies and rates.
Blankfein, Viniar
Blankfein’s comments about shuttered proprietary businesses, and similar remarks a year earlier by Viniar at a conference in Miami, referred to those two teams, DuVally said in his e-mail. The firm has said in filings that Principal Strategies was closed in 2010 and global macro in 2011.