Monday, June 23, 2008

Bear Stearns Mortgage Traders Leave for Goldman, RBS (Update1)

By Jody Shenn

June 23 (Bloomberg) -- Bear Stearns Cos. mortgage-trading executives Scott Eichel and Jeffrey Verschleiser agreed to take jobs with Royal Bank of Scotland Group Plc and Goldman Sachs Group Inc., according to people with knowledge of their plans.

Eichel, 33, who was co-head of mortgage- and asset-backed bond trading at the time of New York-based Bear Stearns's near- collapse, will join Greenwich, Connecticut-based RBS Greenwich Capital Markets, said one person, who declined to be named because the announcement hasn't been released. Verschleiser, 39, will help manage New York-based Goldman's mortgage department, two other people said.

``Bear Stearns had a very good reputation in terms of their trading abilities,'' said Don Brownstein, chief executive officer of Stamford, Connecticut-based Structured Portfolio Management LLC, which runs fixed-income hedge funds with about $1.5 billion in assets. ``They certainly were a powerhouse in the mortgage business, so it doesn't surprise me at all'' that the firm's staff is being recruited by other companies, he said.

At least 21 other senior employees have joined other companies since New York-based JPMorgan Chase & Co. agreed to buy Bear Stearns in March, according to data compiled by Bloomberg. The second-largest underwriter of mortgage debt last year, Bear Stearns sold itself after an exodus of clients and lenders threatened to plunge the company into bankruptcy. The transaction was completed on June 2.

Retaining Employees

Andrea Rachman, a spokeswoman for Goldman, declined to comment. Brian Marchiony, a spokesman for JPMorgan, and RBS Greenwich's Peter Ward didn't return calls for comment. Verschleiser didn't respond to messages left on his mobile telephone seeking comment.

Verschleiser was co-head of Bear Stearns's mortgage-trading business with Mike Nierenberg until late last year. They were replaced with Eichel and Josh Weintraub, who departed in April for GMAC LLC's Residential Capital LLC home-loan unit.

Goldman is adding to its ranks after Dan Sparks, who had run the department, left after 19 years. Josh Birnbaum departed to form a hedge fund.

JPMorgan, the third-largest U.S. bank, has been seeking to retain select Bear Stearns employees. The bank planned to replace 2,000 JPMorgan workers with Bear Stearns staff, a person familiar with the matter said last month.

Jeff Mayer and Craig Overlander, the former co-heads of fixed income at Bear Stearns, left JPMorgan even after they were named vice chairmen of the investment bank.

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