Jefferies Group LLC wrongfully fired its former Asia head of equity trading Grant Williams over a newsletter that included a reference to a Hitler parody video, a Hong Kong judge ruled. Williams drafted a newsletter to subscribers which included a link to a video clip depicting Adolf Hitler, with subtitles created by a U.S. filmmaker that mocked JPMorgan Chase & Co. Chairman and CEO Jamie Dimon. The newsletter was released prematurely and Jefferies fired Williams the next day for unacceptable and inappropriate conduct, according to the judge. Jefferies management was “hypersensitive” and “irrational,” in its response to the publication of the Dec. 7, 2010 client newsletter, Judge Conrad Seagroatt said in issuing his decision today in Hong Kong’s High Court…The YouTube Inc. parody video clip uses a scene from the 2004 German movie “Downfall” showing Hitler screaming at his subordinates at the end of the war. Subtitles suggested Hitler’s character was Dimon, speaking in the context of bets on the price of silver. [Bloomberg]
Judge Rules Jefferies Should’ve Just Chilled After Senior Equities Exec Sent Around Video Depicting Jamie Dimon As HitlerBy Bess Levin
Jefferies Chief Executive Officer Richard Handler said he sued to stop construction of a roof deck across the street from his Tribeca apartment on behalf of his neighbors, according to an e-mail to employees. “I took the lead to help our neighborhood oppose what we know will be a major nuisance and disruption to our lives,” Handler, 51, said in the March 31 correspondence, the contents of which were confirmed by a Jefferies spokesman. “You can be assured we are not going after the city in any way and are only asking for their help in dealing with a huge potential problem.” Handler told employees he wrote the e-mail to apologize for “recent distractions in the media concerning me,” including stories that portrayed him as a “tone-deaf one-percenter.” [Bloomberg]
We* don’t really find it particularly amusing amusing or post-worthy that a Jefferies employee misguidedly put Jamie Dimon on an email about a working group list but judging by the number of people who’ve sent it to us, this is the height of banking humor, so here you go: Read more »
I’m mesmerized by this JPMorgan research chart showing that big banks shouldn’t be broken up because they lend so much more to businesses and consumers than small banks do. See:
Basically for every dollar of normalized capital, JPMorgan has extended $12 of credit between March 2010 and September 2012, according to this note by JPM’s Michael Cembalest. Whereas the small banks have loaned out only about $2. Get with the program, small banks!
The trick here – besides “normalized capital”1 – is that “credit extended” means (1) “changes in commercial and consumer loan balances” plus (2) syndicated loan, corporate bond, muni bond, etc. underwriting. That is, if you stand between a company looking for money and the market that provides it, you get, um, credit for extending credit, whether you do that standing-between in traditional banking ways (take deposit, make loans) or in traditional investment banking ways (match bond buyer with bond issuer). “See, we’re lending,” says JPMorgan. “We’re just not lending our money.”2
As a rhetorical move, I say: A+. Read more »
Dick Handler ended up doing pretty okay for himself. Read more »
52. On March 31, 2010, Customer A, an investment adviser to a private fund, asked Jefferies to find buyers for several MBS, including Lehman XS Trust Series 2007-15N 2A1 (LXS 2007-15N 2A1) and Harborview Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series 2006-10 2A1A (HVMLT 2006-10 2A1A). [Jefferies trader Jesse] Litvak approached a representative at AllianceBernstein about buying the MBS.
53. Litvak told the AllianceBernstein representative that the seller had offered to sell the HVMLT MBS at 58-00 and the LXS MBS at 58-8:
- he will sell to me 20mm orig of hvmlt 0610 @ 58-00 but he is being harder to knock back on the lxs bonds … said that he thinks that one is much cheaper yada yada yada … he told me he would sell them to me at 58-8 (30mm orig) … I would be fine working skinnier on these 2 … but think you are getting good levels on these …
- is he paying u or am I?
- all the levels I put in this room are levels he wants to sell me … I will work for whatever you want on these …. so to recap levels he is offering to me:
hvmlt 06-10 2a1a (20mm orig) @ 58-00
lxs 40mm orig at 58-8…
- Can u wash the hvmlt and [add] 5 ticks to lxs?…
- thats fine.
54. Litvak misrepresented to AllianceBernstein the prices at which Jefferies had acquired the MBS for re-sale. Litvak bought the HVMLT MBS at 57-16 (not the “58-00” he told Alliance Bernstein) and he acquired the LXS MBS at 56-16 (not “58-8” he represented).
55. Litvak also misrepresented the compensation that Jefferies would receive for these trades. AllianceBernstein purchased the $20 million HVMLT MBS at 58 and $40 million of the LXS MBS at 58-13. As a result, on the HVMLT trade, Litvak made 16 ticks for Jefferies; he did not work for free (or “wash” the trade) as he had agreed. And, on the LXS MBS, Litvak made 61 ticks for Jefferies; he did not work for “5 ticks” as agreed.
56. As a result of his misconduct, Litvak made over $600,000 more for Jefferies on the LXS trade and over $50,000 more on the HVMLT trade.
That’s from the SEC’s complaint against former Jefferies trader Jesse Litvak, who apparently made a habit of this sort of thing. He would (allegedly!) tell a potential buyer (seller) of RMBS bonds that he had a seller (buyer), but he would inflate (deflate) the price that he was supposedly getting from the other side in order to inflate his spread. This worked 25 times – that the Feds caught – and allegedly made Jefferies $2.7 million in deceptive profits. This is particularly lovable: Read more »
Back in the day, as in pre-crisis, bonus season on Wall Street was a happy time. Sure, you still had your miserable pricks who would bitch and moan about the fact that they hadn’t gotten as much as the guy who sat next to them, even they the guy who sat next to them was a “non-contributing zero who wouldn’t recognize alpha if it bit him in the ass,” but prior to to fall 2008, anyone who was unhappy about his or her bonus was a) quibbling over receiving a huge sum of money instead of an imperial fuck-ton of money and b) in a position to actually make good on a threat to jump ship, since firms were hiring. Now, with a few exceptions, bonus season makes people feel sad. Angry. Powerless. Frustrated. Confused. Like the world is out to get them. Not only has the total amount of one’s bonus come down, but many companies have decreased the cash portion, while increasing the deferral period on stock to, in some cases, almost half a decade. Then you have Jefferies. Last year it let employees decide between an all stock bonus or an all cash bonus with 25% lopped off. This year the investment bank-cum-butcher shop isn’t even forcing anyone to choose, instead dumping a bag of cash on people’s desk and reminding everyone who loves ‘em. Read more »