Of all the hedge funds affected by the government’s crackdown on insider trading, SAC Capital has topped the field in both fines paid and traders charged (can’t give you an exact figure at the moment but it’s “requires spreadsheets to keep track of all the cases” big). And while recognition of peerless achievement is always nice, Steve Cohen has gotten a little tired of waking up to find out another one of his employees chopped up evidence of wrongdoing and scattered it through Manhattan, or (allegedly!) sold stock based on material, non-public information passed on by friends in the medical profession.
Although one would have thought a simple “cool it with the securities fraud, you idiots” or a diagram of a foot in an ass would have sufficed re: sending a message that SAC has had it up to here with people trading in the sort of way the SEC frowns upon, apparently some hard and fast policy changes were necessary. They include:
1. Compensation clawbacks for employees “facing criminal or civil cases,” for whom the possibly of prison is not enough of a deterrent.
2. Requiring portfolio managers to get permission from compliance before taking calls with expert network analysts, after the first four freebies. Read more »
One might think that being terminated by Goldman Sachs for taking “inappropriately large proprietary futures positions in a firm trading account” and “violating investment-related statutes, regulations, rules or industry standards of conduct” might make it hard to get another job on Wall Street.
Not at all. It might make it hard, however, to get your deferred compensation after you plead guilty to fraud, re: said inappropriately large futures position. Read more »
Like many of its peers in the banking world, RBS used to make a habit of manipulating Libor (among other things). And, as recent reports suggest, the Royalest Bank of Scotland is probably going to be forced to cough up £300m (and fire a couple execs) to convince the government everyone is very sorry and it won’t happen again. How does the bank, which has not had a money-making quarter since the financial crisis,* plan to come up with the cash? By 1) taking back bonuses that were already paid out to people who were involved in the scandal and 2) reducing everyone‘s bonus this year. Read more »
In Wake Of Exec “Accidentally” Stabbing A Cab Driver, Morgan Stanley Insists You Ask, “What Would The Post Say?”By Bess Levin
A year ago this Friday, a Morgan Stanley banker named William Bryan Jennings attended a couple holiday parties, drank a few Coors Lights, and around 10:30PM hailed a cab and asked the driver, Helmy Ammar, to take him home to Connecticut. On the way, a hungry WBJ requested they stop at G&G Deli off 10th Avenue, where he bought “a 20 oz. bottle of Aquafina water, a sandwich and some Burger King cheesy fries.” As the cab entered approached Jennings’ hometown of Darien, a dispute reportedly broke out as to what the fare for the ride would be. Ammar claims that they’d agreed on $204 before leaving Manhattan, but once in Connecticut, Jennings said he’d only pay $50. Jennings claims that Ammar jacked the price up to $300 and was unhappy when the banker offered $160. Another matter of he said/he said is whether or not Jennings started shouting racial slurs at Ammar and told him, “I’m going to kill you. You should go back to your country!” (Jennings denies this happened and says that Ammar locked the doors and wouldn’t let him out of the cab.)
The one aspect of the story that is not in dispute is that as tensions flared, WBJ whipped out a pen knife he had in his pocket. For those of you reading from Morgan Stanley, this is where the teachable moments occurs: if you ever find yourself in a situation wherein you’re winding up to stab a cab driver in the hand, stop and ask yourself, “Is this going to look bad in the Post tomorrow morning?” Jennings did not and now this is happening: Read more »
Those shares DB awarded you to make up for the ones you were leaving with your old employer? They’re going to need those back. Read more »
Dimon was approached by reporters after the [shareholder] meeting and was asked about whether executive pay would be taken back under the bank’s clawback provisions. “We will do the right thing…And that may well include clawbacks,” Dimon said. “The buck always stops with me.” [WSJ, earlier]