Reason number one that Steven Mandala not only helped himself to $780,000 from the firm, but lied to get the job in the first place: he’d obviously tasked himself with testing MER’s due diligence and background checks on prospective employees, which he rightly assumed were not up to snuff:
Mandala, who earned about $100,000 annually at Maxim, last year applied for a job at Merrill Lynch, falsely claiming he was a partner at Maxim, that he managed $300 million in client assets and earned $765,000 in compensation against $1.5 million in revenue he generated, the Manhattan DA’s Office said. After Mandala produced fake pay stubs and tax forms to substantiate his bogus claims about his Maxim work, Merrill hired him on April 24, the DA said.
Over the next few months, after Mandala had his new boss loan him the 780 grand as “an incentive,” deposited the money into his parents’ bank account, and withdrew $245,589 to buy a red Ferrari, Mandala “frequently” failed to show up to work and only brought in two or three clients, which was undoubtedly part of his undercover work to see if management was keeping tabs on people. Determining he’d seen enough, SM the “resigned via e-mail” and “asked Merrill Lynch to throw out his personal effects,” so he could focus on other projects, like scamming his woman’s father, which required a bit more attention than taking ML for a ride.
Among [his personal affects] were credit cards obtained in the name of Carlos Gomes — the dad of Mandala’s girlfriend — which the broker had allegedly used to rack up tens of thousands of dollars in debt. Mandala’s lawyer, Franklin Rothman, said Gomes’ ID had been stolen by his daughter, “who had a bone to pick with her own father.”
Ex-banker Steven Mandala steals $780,000 from Merrill Lynch, buys Ferrari (NYDN)
Oh no he di’int! “The money went into his parents’ checking account to purchase the sports car,” Korenstein said. “He purchased the Ferrari, drove the Ferrari, but it’s registered to his father’s name.” Fox Business lures Gasparino away from CNBC (WaPo)
“I always wanted to work for Fox,” Gasparino says. “I don’t take chances with stories. I do take entrepreneurial chances with my career.” Gasparino denies that tensions at CNBC were a factor in his decision, saying “newsrooms are generally seething places” and he tends to “wear my heart on my sleeve.” But he did issue a warning to his former employer: “My job is to rip the lungs out of the competition for Fox Business Network.” Busy Buffett Ends An Annual Meeting Tradition (Reuters)
Citing “escalating attendance and time constraints,” Berkshire Hathaway said on Tuesday Buffett will discontinue a traditional “meet and greet” session with shareholders from outside the United States and Canada. Citigroup Stock Proving Irresistible to Hedge Funds Led by Paulson, Soros (Bloomberg)
Everyone wants a piece of that Vikram. Elders Of Wall Street Favor More Regulation (NYT)
The Olds: “While the younger generation, very visibly led by Lloyd C. Blankfein, lobbies Congress against such regulation, their spiritual elders support the reform proposed by Paul A. Volcker and, surprisingly, even more restrictions. “I am a believer that the system has gone badly awry and needs massive reform,” said John Bogle, the 80-year-old founder and for many years chief executive of the Vanguard Group, the huge mutual fund company.”
Got to give it up for Volcker, who, despite growing uproar against his proposed eponymous rule, is soldiering on, saying it’s the best thing that ever happened since well, ever. Volcker is however getting increasingly frustrated and said he is “very disturbed” by the level of dysfunction in Capitol Hill and the Senate, and basically, WTF is going on with these people who can’t get things done?
In a CNN interview yesterday, Volcker said that regulators screw up big time in the years leading to the crisis, as a) they weren’t “on top” of anything and b) they didn’t understand what was going on anyway, relying on “somebody down in the bowels had it under control.” Also financial innovation sucks. The only innovation that has added value recently, is the ATM machine.
Bove has a newfound love interest: Jamie D. and we hope this will help him heal the Ken Lewis wounds. In a report today, Dick praises JP Morgan’s acquisition of some of RBS Sempra’s assets, not only because it makes sense business-wise, but mostly because it shows Jamie’s guts and manhood.
I believe that Mr. Dimon is demonstrating a courage sorely lacking elsewhere among other leaders of American banks. Bravo!!
On the popularity Undercover Boss, wherein CEO’s of various companies “slip into the ranks” of their company alongside entry level employees to get a little taste of how the other half of their firm lives, Vikram Pandit has been nominated to appear on an episode of the show. Obviously, seeing Pandito pose as a first year analyst would be phenomenal, and a thrill for the bank’s junior rainmakers. There would be night-before jitters, of course, and it’d be hard to watch Uncle Vik sweat as he gets reamed out for screwing up his first pitch book, but clearly that’d be part of the fun. Unfortunately, it’s unlikely that VP will accept the offer, unless he’s directed to do so by Prince Alwaleed as part the new mandate for 2010 (Operation Make This Thing Work). Rest assured we’re working on it, but in the event Vikram chooses to remain ensconced in his zen garden-less office, who would you like to see cast on the show? Lloyd Blankfein rank and filing with the mini-Squid? Stevie mixing it up with the back office and later, forced to make an important decision? Lenny Dykstra reporting for duty as a junior trader at Nails Investment Corp? Ken? Jamie? Cliff? And what do you want them to have to do once they’re when they’re down there? No wrong answers on this one.
Hank Paulson is making the media rounds and yesterday it was the New York Times’ turn. In a 1040-word long op-ed/sales pitch for his new book, the former Treasury Secretary argues that while financial reforms are urgently needed, Obama’s Volcker Rule proposal suck and won’t work.
In the market for a place to call home in Charlotte, North Carolina? Want a place filled with memories and a wet bar where many a Boone’s cocktail was stirred? Fantabulous news– Ken Lewis is trying to sell his house. The 7517 Morrocroft Farms abode comes with 4 bedrooms, five fireplaces, a patio, a porch, a private pond for reflection time (“is this Merrill thing a good idea or a great idea?”), marble floors, and surround sound, all for the extremely reasonable price of $4.5 million. No one else has lived there (the place was “custom made” for Lewis in 1995), so you won’t have to wonder who left the vomit stains on the rug in the master bath, which is comforting. The listing also comes with a handy mortgage calculator and we’re told Countrywide CEO-cum-Bank of America butler Angelo Mozilo would be happy to sit down with you and talk options.
Barclays Net Profit Doubles (MarketWatch)
The bank said that its 2009 net profit more than doubled to 9.39 billion pounds ($14.73 billion) from 4.38 billion pounds a year earlier, due to gains from the disposal of Barclays Global Investors. The bank said pretax profit, including a 6.33 billion pounds gain from BGI, rose 92% to 11.64 billion pounds, slightly ahead of a 11.31 billion pound forecast. Phibro chief’s new fund delivers a touch of history (FT)
Andrew Hall has started a hedge fund! It’s called Astenbeck Capital Management and it will be “run parallel with Phibro.” The team has $1.4bn under management already but it still accepting new money. $25 million minimum. Get in now. RBS Rejiggers Fixed Income Unit (WSJ)
RBS said on Monday that London-based head of interest-rates trading Steve Ashley had resigned along with European flow-sales head Chris Fleming, prompting global markets head Peter Nielsen to announce a reorganization of the division. The bank is adopting the fixed-income, currencies and commodities structure. “By aligning our world-class fixed-income businesses, we will be able to more effectively face off with our competitors, service our clients, and this will assist us in developing both our products and our people in accordance with global best practices,” Mr. Nielsen wrote in a memo. The Power Of Art (NYT)
Rich people stopped shelling out record amounts for it last year but just for a little while. Earlier this month, an anonymous art lover paid a record $104.3 million to scoop up “Walking Man I,” a 1960 sculpture by Alberto Giacometti. What Is Hedge Fund King John Paulson Doing in Greece? (AlterNet)
“That Goldman was shepherding hedge fund client Paulson around Athens in recent weeks would seem to suggest that the bank and hedge fund are working together in Greece.” And not just on making money but on their tans. Not saying JP and LB were spotted rubbing each other down with baby oil, but not not saying it either.
Charlie Gasparino Expectede To Join Fox Business (TVNewser)
If you’ve been missing your Jabroni Pony, great news: after taking the last few months off to work on his pecs, Gasparino is back (*full accounting of CG’s new weight room/sauna routine coming this week). ALSO: it’s possible he’s going to grow the stache for his debut on the new network. Wall St. Helped to Mask Debt Fueling Europe’s Crisis (NYT)
“Banks eagerly exploited what was, for them, a highly lucrative symbiosis with free-spending governments. While Greece did not take advantage of Goldman’s proposal in November 2009, it had paid the bank about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.” Hank Paulson scorns Barack Obama’s banking reforms (Sunday Times)
“I do not believe that the idea of a ban on proprietary trading for one type of institution is going to solve the problem,” Paulson told The Sunday Times. “The problem we had in our country, and in yours, was broad-based. It wasn’t limited to one type of institution or one type of activity. “These large institutions pose a dangerously large risk, but … I would like to see regulators deal with it, not politicians coming up with a set of rules that will become outmoded and outdated over time.” Positive sign? ‘Credit crisis’ hedge funds close up shop (Crain’s)
Manhattan-based BlueMountain Capital Management abruptly liquidated its distressed debt fund in early February, after just 11 months of operation, returning the money to investors. The $100 million fund was launched last spring to take advantage of the liquidity crisis by snapping up cheap debt that investment firms were unloading for cents on the dollar. Deutsche Bank Said to Defer Greater Share of Bonuses Amid Pay Controversy (Bloomberg)
DB has “introduced a sliding scale forcing top bankers to defer a bigger proportion of their bonuses, said two people with direct knowledge of the plan. The rule applies to 2009 bonuses of more than 100,000 euros ($136,000), said one of the people, who declined to be identified because the plan is private. Bankers will have to defer at least 25 percent of bonuses above that amount, the people said. The marginal deferral rate will increase to as much as 90 percent as the bonus crosses a series of thresholds.” Shaq: I’m No Duped Investor (NYP)
As had been alleged by Tim Sykes. Corrections (NYT)
Awkward: “In a number of business articles in The Times over the past year, and in posts on the DealBook blog on NYTimes.com, a Times reporter appears to have improperly appropriated wording and passages published by other news organizations. The reporter, Zachery Kouwe, reused language from The Wall Street Journal, Reuters and other sources without attribution or acknowledgment. The Times was alerted to the problem by editors at The Wall Street Journal. A subsequent search by The Times found other cases of extensive overlap between passages in Mr. Kouwe’s articles and other news organizations’. (The search did not turn up any indications that the articles were inaccurate.)” Eliot Spitzer Discusses The Cataclysm Of 2008-2009 (ZH)
Reason number one that Steven Mandala not only helped himself to $780,000 from the firm, but lied to get the job in the first place: he’d obviously tasked himself with testing MER’s due diligence and background checks on prospective employees, which he rightly assumed were not up to snuff:
