The traders inside Goldman Sachs will have a new CIO that decides what trading technology they use. In an internal memo intercepted by Reuters, Goldman Sachs Group will promote R. Martin Chavez to the chief information officer role once Steven Scopellite retires at the end of the year.
Chavez is currently the co-chief operating officer of Goldman’s equities business. Reuters reports that Chavez is “known for his technological and analytical skills, having overseen the creation in the 1990s of an internal software platform that is now called Marquee, but was first called ‘Marty.'”
Goldman is also promoting Don Duet and Paul Walker to co-heads of technology and they will report directly to Chavez, who will report to Chief Administrative Officer Jeffrey Schroeder.
This is important news for the traders inside Goldman Sachs, a firm that is known for its aggressive business tactics but its technology has been derided in the press. Last month, in a story about a former GS programmer who was arrested for allegedly stealing code, Moneyball author Michael Lewis writes that Goodman Sach’s technology was behind the times.
Here’s what Goldman Sach’s trading technology looked like a few short years ago:
http://www.vanityfair.com/business/2013/09/michael-lewis-goldman-sachs-programmer
Goldman had bought the core of its system nine years earlier in the acquisition of one of the early electronic-trading firms, called Hull Trading. The massive amounts of old software … and nine years of fixes to it had created the computer equivalent of a giant rubber-band ball. When one of the rubber bands popped, Serge (the accused code thief) was expected to find it and fix it.
[The Trading delays] could also be caused by slow, clunky software-and that was Goldman’s problem. Their high-frequency-trading platform was designed, in typical Goldman style, as a centralized hub-and-spoke system. Every signal sent was required to pass through the mother ship in Manhattan before it went back out into the marketplace. “But the latency [the five milliseconds] wasn’t mainly due to the physical distance,” says Serge. “It was because the traffic was going through layers and layers of corporate switching equipment.”
It looks like Chavez has his hands full if he wants to keep the traders inside Goldman Sachs happy.