Early in their training, Edward Jones brings new brokers to its headquarters, where they practice knocking on doors and talking over finances in “role-play suites” designed to look like homes or offices, Kuehl said. They review tapes of themselves with coaches to improve their technique, he said. [Bloomberg]
Morgan Stanley Would Prefer Employee/Friend Of Brothel Owner Not Be Seen Around The Office For The Time BeingBy Bess Levin
Despite telling Morgan Stanley’s legal counsel that he and Anna Gristina/Scotland were merely “friends” as opposed to partners in a whorehouse that he was supposedly trying to help her line up financing for, broker David Walker, who has not been charged with anything, has been put on administrative leave “until the Manhattan district attorney’s office concludes its investigation.” [FBN, earlier]
Earlier this morning it was reported that Morgan Stanley “reviewed its visitor logs” upon hearing that one of its employees was supposedly conducting business with Anna Gristina/Scotland, a purveyor of prostitutes, when she was arrested this week. In the event the bank is still on the hunt, Charlie Gasparino claims to have a name. Read more »
Citi Clients Not As Understanding As Firm Would’ve Thought About Funds That Lost Them Their Entire Investment, Currently Being Investigated By The SECBy Bess Levin
From 2002 to 2007, Citi raised $2.8 billion from clients to invest in a couple of fund series called MAT Finance LLC, which invested in municipal bonds and was eventually leveraged 8:1 and Falcon, which invested in mortgage debt. Despite the former being marketed as “an attractive alternative to a bond index” and the latter receiving an S&P rating “equivalent to safe, medium-term government bonds,” anyone who bet on the funds lost what might be characterized as “a metric ass-ton of their money.”
For exampe, the funds a team of brokers from Smith Barney put their clients in fell an impressive 80% to 97% from May 2007 to March 2008. Though Citi claims no foul play and offered to cover approximately one-eighth of clients’ losses, the SEC still felt the need to launch an investigation into whether or not the bank’s employees adequately disclosed the funds’ risks and/or mismanaged them. And apparently investors are still pretty miffed about the whole thing, which one broker, Michael Johnston, intuited by the response he got from one when suggesting a sweet buyback deal that would’ve translated to the client only losing 72% and promising not to sue Citi. Read more »
August 10, 2010, is the day that will go down in history as the one in which fed up employees left their jobs in style. Yesterday afternoon, Steven Slater, the greatest flight attendant of all time did it via obscenities-laced tirade/inflatable slide and just a few hours prior to that, Assistant Jenny was putting her own spin on things. Read more »
Prudential Douglas Elliman broker Darren Sukenik has rules for people who come to his open houses: have the cash to buy what he’s selling, don’t waste his time, and do not bring god knows whatever is on your shoes into this apartment. In order to ensure prospective buyers abide by commandment number three, Sukenik typically insists people either take off their shoes before entering or cover them with “surgical booties.” Explaining his rationale, he told the Times, “[These] apartments are precious…you want to make it feel like a jewel box. You wouldn’t wear construction boots in a jewel box.”
Usually, people play by Sukenik’s rules. There is one group of people, however, who’ve brought some friction to the table.
Mr. Sukenik said that in the past, some buyers, especially hedge fund executives who view it “humbling” to bare their feet, have angrily stormed out.
Ex-Merrill Broker Who Ripped Off $780,000 From Bank Pleads Guilty, Frauds Everywhere Weep For Loss Merrill’s Mensa MembersBy Bess Levin
Steve Mandala is the guy who took Merrill Lynch for $780,000, and with some of the cash, bought himself a red 2006 Ferrari F430 Spider. Prior to joining the bank, he was a broker at Maxim Group who earned about $100,000 annually. He sensed that there was some money to help himself to at Mother Merrill but didn’t think he’d be able to land the gig. So, he lied and told them he was a partner at Maxim, where he managed $300 million in assets and took home $765,000 a year. This probably would not have worked at some other firm, but Merrill was a special, special bank.
“Somehow you got them to hire you because you told them you had big-time clients?” acting state Supreme Court Justice Carol Berkman said to Mandala in court, referring to Merrill Lynch.
You’d think strip clubs, steak houses, and Real Doll outfitters would be the only ones feeling the pinch of financial professionals not making/spending any money, but you’d be wrong! In Northern New Jersey, bagels and cheese, items heretofore considered staples in the community, are being cast aside, deemed luxuries too expensive to justify in these hard times. Rick Breistein, proprietor of the Cheese Shop of Ridgewood which sells $60/pound English Stilton and Brillat-Savarin, says that many of his former customers are “bond traders…[who] don’t come in anymore…they are suffering–they are not making the money.”
And according to bagel guy Elliot Cohen, there’s been a dramatic drop in orders from the nearby Morgan Stanley and Smith Barney. “We used to get breakfast and lunch deliveries there, and we’ve seen a lot less,” he said. “One guy used to buy breakfast for the whole group on Friday. He doesn’t come anymore.” I speak for everyone here when I say there’s an almost unbearable sadness about this permeating the DBHQ this morning. So here’s what–our sandwich welfare program is now being extended to include bagels and lox. If you know a deserving individual who can no longer afford his/her own shmear, get in touch. Jews and non-Jews welcome. Any requests for flagels will be sent to spam.
Wall Street’s Pain Felt By North Jersey Retailers [The Record]
The Gaunlet Has Been Thrown Down. Who Will Pick It Up? We’re Looking At You Leon Cooperman. Stevie-boy. L-TRAIN.By Bess Levin
True Story: Yesterday at around 5pm at Ulysses on Stone Street…Ian Roncoroni, an energy otc options broker for Power Merchants Group…ate 244 Oysters in 1 hour. He also collected $3500 bucks for his efforts.
The Bear Stearns deal is getting messier. Wall Street rivals are poaching the best talent, forcing JP Morgan to promise lots of compensation money to keep them in place or face acquiring Bear with only the losers left. Unfortunately for the best laid plans of the Fed and JP Morgan, the uncertainty over the deal is leading many Bear employees to figure they’d be better off taking offers from competitors.
So now Bear is fighting back, asking a New York State court to issue restraining orders against departed brokers who Bear claims are soliciting the firm’s clients to do move their business to the new company, Kate Kelly and Robin Sidel of the Wall Street Journal are reporting. These solicitation lawsuits are nothing new on Wall Street but they come at a very awkward time for Bear and JP Morgan. Morale is already low. The lawsuit puts a spotlight on the fact that many of the best employees and customers may have already left the firm, and doesn’t exactly reassure worried employees that Bear is friendly toward its cubs.
One Bear recently departed Bear employee we spoke with this morning wondered how hard any former Bear employee would have to try to solicit clients away from the company.
“If you’ve read the papers, you know no-one wants to do business with Bear. They don’t hate their own contacts, though. So if you hear your broker, or the desk you dealt with, has moved over to, say, Morgan Stanley, why wouldn’t you move? Keep your business in a failing firm with people you don’t know or join the pack and stick with who you know. Not a hard choice,” he said.
Bear Seeks Restraints On Departed Brokers [Wall Street Journal]
Yesterday we pointed out that the freeze-up in auction-rate securities could lower demand for equities as many individual investors found their investment assets essentially locked into these suddenly illiquid bonds. But it’s not just the clients of brokerages who are facing a cash squeeze—the brokers and executives at investment banks are facing the squeeze as well
After the major accounting firms ruled that auction-rate securities were not cash-equivalents, many corporate investors began to reduce the use of these instruments for cash management purposes. But executives at banks such as Citi, Merrill Lynch and Goldman Sachs continued to use the auction-rate securities. For many, the extra two-dozen or so basis points they could earn by holding the securities rather than a true cash-equivalent made them irresistible. For the men and women who manage money and put together complex financial transactions for a living, achieving maximum returns in every part of their portfolio is often a point of pride.
Now that many of the auctions have begun to fail, they find themselves without access to their assets. Ironically, this pain for the professionals may wind up helping their clients. If the auction failures continue, executives on Wall Street may pressure the banks to take action to revive the market. It’s one thing if the clients cannot buy fuel for their yachts. It’s quite another if the broker cannot.