NEW YORK Goldman Sachs Group Inc (GS.N) has named R. Martin Chavez to become chief information officer when Steven Scopellite, a 28-year veteran of the bank's technology group, retires at year-end, according to internal memos on Monday.
Chavez is now co-chief operating officer of Goldman's equities business. He 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.
In another memo, Goldman said it will promote Don Duet and Paul Walker to co-heads of technology, reporting to Chavez, who will in turn report to Chief Administrative Officer Jeffrey Schroeder. Duet most recently served as chief operating officer of Goldman's technology division, while Walker has been global head of risk and strategy for prime services since 2012.
"As markets and regulations evolve, Marty will lead our efforts to ensure that we deploy effective and innovative technology to address our clients' needs," said the memo, signed by Chief Executive Lloyd Blankfein, Chief Operating Officer Gary Cohn and Chief Financial Officer Harvey Schwartz.
A spokesman confirmed the memos' contents.
Changes to Goldman's technology leadership come as Wall Street undergoes sweeping technological changes in response to new regulations, as well as pressure to cut costs while improving speed, quality and service.
Banks have been spending billions of dollars to upgrade technology to allow more trading to take place electronically. For instance, JPMorgan Chase & Co (JPM.N), the largest U.S. bank, spends $8 billion a year, or about 12 percent of its annual expenses, on systems and technology alone.
However, even as the industry spends on upgrades, a spurt of technological woes have cost banks, brokers and exchanges millions of dollars.
One of the latest incidents occurred in August, when Goldman itself lost tens of millions of dollars on a series of erroneous equity options trades. Four employees were put on leave as a result of the embarrassing error, which stemmed from a problem with new code.
STRAT TO CIO
Chavez joined Goldman in 1993 as a senior energy "strat" - internal parlance for a quantitative analyst. In addition to overseeing the bank's technology as CIO, he will share responsibility for overseeing the quantitative analysts' group.
Chavez holds a bachelor's degree in biochemisty and a master's degree in computer science from Harvard University, as well as a doctorate in medical information sciences from Stanford University. He took a hiatus from Goldman from 1997 until 2005, during which time he founded two technology companies and headed energy derivatives at Credit Suisse Group AG CSGN.VX.
He became a managing director upon returning to Goldman and was named partner in 2006. He sits on the bank's management committee and on its Steering Committee on Regulatory Reform, which coordinates the bank's response to new regulations. Chavez also represents Goldman as a director of the International Swaps and Derivatives Association.
Scopellite joined Goldman in 1986 as a software engineer and has been a chief information officer since 2007. He was named managing director in 1998 and partner in 2000.
Other big banks have also made changes to technology leadership recently.
In April, Morgan Stanley (MS.N) named Moira Kilcoyne and Steve Lieblich as co-heads of global technology and data, and Phil Davies as global head of operations, replacing Stephen Daffron, who retired as head of all three areas. The following month, former JPMorgan CIO Guy Chiarello left for First Data Corp. The bank named Mike Ashworth as interim CIO while searching for a permanent replacement.
Bank of America Corp (BAC.N) replaced Marc Gordon with Laurie Readhead as CIO in April 2012, while Wells Fargo & Co (WFC.N) CIO Kevin Rhein has been in that role since 2011. Citigroup Inc's (C.N) comparable role is held by Don Callahan, head of operations and technology, who joined the bank in 2007. Citi recently appointed a former General Electric Co (GE.N) CIO to its board of directors.
(This story was fixed to correct the name of the school at which Chavez earned master's degree to Harvard from MIT in the 11th paragraph. In the last paragraph, corrects to say that Marty Lippert is not Citigroup's CIO and that Don Callahan is effectively CIO)
(Reporting by Lauren Tara LaCapra; Editing by Leslie Gevirtz, Paritosh Bansal and Leslie Adler)