Here's Why Goldman Sachs Fired Its Top FX Guy

Author:
Updated:
Original:

Yesterday, news broke that Goldman Sachs had fired one of its top foreign exchange salesmen in London. Immediately, people began wondering what had happened. Word was that Kevin Connors, who was co-head of global forex sales for G10 currencies, had abruptly departed last week. Goldman was officially declining to comment. But it was clearly the source of comments explaining that Connors had not acted illegally or harmed clients. So what happened?

The only explanation offered yesterday was that Connors, who first joined Goldman in 1990 and was elevated to partner in 2008, had violated firm rules. That was rather vague and unsatisfying.

It also gave rise to lots of false rumors and unsubstantiated speculation. Was Connors dating a subordinate at the firm? Had he gone "rogue" and exceeded his trading limits? Other questions that people were asking yesterday were even more tawdry.

A person familiar with the matter has told NetNet that Connors was let go for holding outside investments that he hadn't disclosed to the firm. Holding the investments was a violation of firm policy, the person said.

Of course, that explanation gives rise to even more questions. What were the investments? Why would someone in Connors' elevated position risk everything on outside investments?

Connors was likely one of the top earners at Goldman Sachs. It is hard to imagine what outside investment could be so valuable as to be worth the risk of losing his position.

NetNet has not been able to confirm this explanation with additional sources. Connors could not be reached for comment. Goldman Sachs was not immediately available for comment.

Read More: Here's Why Goldman Sachs Fired Its Top FX Guy
Citi's Big Problem Expenses, Not Revenue
Does Medical Leave Pose An Ethical Challenge For Steve Jobs?

Related

News

Goldman Sachs Needs A New FX Sales Co-Head

News

Guy Who Was Fired By Goldman Sachs For Amassing "Inappropriately Large" Position Welcomed With Open Arms At Morgan Stanley

Back in December 2007, things weren't going so well for Matthew Marshall Taylor. He'd just been fired from Goldman Sachs and not only was he out of a job, but his prospects for finding a new one didn't look so hot, on account of the fact that Goldman planned to put a note in his file detailing the reason he'd been let go-- "for building an 'inappropriately large' proprietary trading position"-- and it seemed unlikely anyone at the firm would be open to serving as a reference for him moving forward.  Three months later, however, one bank told MMT that there was room for him at their inn. Morgan Stanley, apparently having decided the incident at Goldman was but an asterisk in what would be a long and fruitful career, told Taylor to come on down, employing him for over four years until he left in July of his own accord and not because of any legal issues relating to his work at Goldman Sachs. Taylor was accused yesterday by the U.S. Commodity Futures Trading Commission of concealing an $8.3 billion position in 2007 that caused Goldman Sachs to lose $118 million. Goldman Sachs fired Taylor in December 2007 and cited “alleged conduct related to inappropriately large proprietary futures positions in a firm trading account,” in a so-called U-5 form, according to a Financial Industry Regulatory Authority document. Morgan Stanley, which had employed Taylor before he joined Goldman in 2005, re-hired him in March 2008, according to the records. Taylor, who handled client-related equity derivative trading at Morgan Stanley, left the firm in July, according to Mark Lake, a company spokesman in New York. His departure wasn’t related to the CFTC complaint filed against Taylor yesterday in federal court, according to a person familiar with the situation, who requested anonymity because the information is private. Taylor concealed the position by bypassing the firm’s internal system for routing trades to the Chicago Mercantile Exchange and manually entering fabricated futures trades in a different internal system, according to the complaint. Goldman Sachs, which wasn’t identified in the CFTC lawsuit, said Taylor allegedly made the trades while employed at the firm. Anyway, since MMT is a free agent at the moment, if any other banks would like to overlook the blip, please do get in touch directly. Citi, BofA? At least just think about it. He was good enough for Morgan Stanley, he should be good enough for you. Morgan Stanley Hired Goldman Trader Accused Of Hiding Position [Bloomberg] CFTC Charges Matthew Marshall Taylor with Fraud for Fabricating and Concealing Trades from His Employer and Obstructing Their Discovery [CFTC]

News

Why I Left Goldman Sachs, Chapter Three: "My Alleged Competition"

In the ping pong game of life, even your most trusted blade can't swat away an opponent with super-sized balls.---Unknown On Monday morning, Grand Central Publishing will release Why I Left Goldman Sachs: A Wall Street Story, a memoir penned by former Goldman employee Greg Smith, based on his op-ed for the New York Times entitled, "Why I Am Leaving Goldman Sachs." When Smith's piece came out last March, few if any senior executives inside the bank were pleased, in part because it came as a total shock. No one at Goldman had known Smith was planning to have his resignation letter printed in the paper. No one had known he had issues with the firm's supposedly new and singular focus on making money at all costs. No one, at least at the top, even knew who Greg was. Obviously all this left the bank at a competitive disadvantage in terms of fighting back and for the time being, Smith appeared to be handing Goldman its ass. Getting cocky, even. Perhaps thinking to himself, "When all of this is over, I could be named the new CEO of Goldman Sachs."  As anyone who has ever won a bronze medal in ping-pong at the Maccabiah Games will tell you, however, winners are determined by best of threes. And that anyone going to to the table with Goldman Sachs should be prepared for things to get ugly. Which is why it should not have come as a surprise that after getting hydrated, regrouping, and coming up with a plan of attack, Goldman kicked off round two with a delightfully bitchy, exceptionally underminery comment to the press re: Smith's tale being no more interesting than that of a disgruntled first-year analyst who thinks he's got a story to tell and then followed it up with a leak of Greg's less than flattering performance reviews to the Financial Times. What probably did come as a surprise, however, was today's breathtakingly aggressive Bloomberg piece re: Mr. Smith wherein: * He's described as a petulant child with unrealistic expectations for his career advancement * It's suggested, by saying outright, that his op-ed complaints about the firm were nothing more than him having "an axe to grind" on account of not advancing beyond vice-president, as demonstrated by the fact that as of 2010, he was happy with the firm, wanted to become a managing director and had no intention of leaving * People are left to connect the dots re: Smith and lady bosses ("Goldman Sachs put a different managing director in charge of Smith as it considered giving him a sales job. The report says he 'found the transition difficult and considered the female MD who ran the desk a peer at not his boss") Relatedly, as we head into the final game of the set with a tie score, the following is a tremendous anecdote from Chapter 3 of Why I Left Goldman Sachs involving an actual game of ping-pong, John Whitehead's Business Principles, and the lessons one learns as a first-year at GS about allowing a client to enjoy the sweet taste of victory despite knowing full-well you could wipe the floor with him or her and bring home the gold, if you so chose. After hearing of my past sports success, Rudy immediately fired off an e-mail to Ted Simpson, saying "Springbok will be representing the New York desk at the Ping-Pong tournament." Simpson wrote back: "Who's Springbok?" In response, Rudy e-mailed him a photograph of a springbok, the actual animal. You had to be there, but I thought it was hilarious. So I flew to Boston on Goldman's tab-- the justification being that while there, I could meet with Prakash and talk Israeli tech stocks-- and met Ted Simpson. […] The backstory of the annual Goldman Sachs Ping-Pong Tournament, Ted told me, was that the same guy, an Indian portfolio manager from Putnam, had won it five years in a row, and that winning the tournament was the highlight of the guy's year. But from the moment I walked into Jillian's- a pleasure palace replete with free-flowing alcohol, spicy chicken wings, bowling alleys, plasma TVs, and dozens of Foosball, pool and table tennis tables-- and saw my alleged competition practicing, I knew he didn't have a chance against me. I'm not trying to brag. But competitive table tennis, like every sport, has its levels. Any number of internationally ranked players could have (and had) made mincemeat out of me, yet simply put, the Putnam portfolio manager (let's call him PPM) and I were not in the same league. I was confident he wouldn't be able to return my serve, and if it came to a rally, he wouldn't be prepared for the kind of sever spins I could put on the ball. I could see he was a very good basement player, nothing more. I could have beaten him in my sleep. The tournament draw was posted. Thirty-two people, and PPM was seeded number one. Since the organizers knew I was good, I was the number two seed. Play began. I was rusty-- I'd been working such long hours since joining Goldman that I'd barely picked up a paddle-- but soon I remembered my form. And nobody gave me a serious challenge. PPM and I plowed through our halves of the draw, heading toward an inevitable confrontation. I watched a couple of his matches. PPM's opponents were easy pickings: recreational players dressed in jeans and polo shirts. And PPM, looking very professional in his special sneakers and running shorts, T-shirt, and headband, was mopping them up. Of course he'd brought his own paddle-- a serious player would never show up without his own stick. And of course I'd brought along my trusty Donic Appelgren blade, red on one side, black on the other. Ted Simpson and I were looking on as PPM took down another player. "So what are we thinking here?" I asked Ted. "I"m going to meet this guy in the final, and if play properly, I'm going to beat him twenty-one to two. What' the right course of action?" Ted looked thoughtful. "Well," he said after a moment, "this guy is one of our biggest clients; he takes this stuff really seriously." At that moment, PPM whaled away at a forehand that just clipped the table edge and skipped off, unreturnable; he raised his arms in victory. "We need to make it a close game," Ted said. "Get some good rallies going." I told Ted I had been thinking along the same lines. That I should beat PPM, because it was obvious I could beat him, but that I should keep it close. Not embarrass him. I knew how to do that, I said. You just make a few unforced errors here and there. "Hmm," Ted said. "You have a different idea?" I asked. "Well, the guy is one of our biggest clients," he repeated, givingme a significant look. "You're suggesting--?" "Maybe," he said. And then: "Watch for my signal." I gave Ted a look-- he was smiling-- and took my Donic out of its case. The match began. A crowd had gathered to watch us play. Everybody was having fun-- except for my opponent, who was taking the match very seriously. When I won a few points in the early going, I could see him getting upset. So I eased up. I could have really turned on the heat, hit some crazy shots past him that would have whizzed by his ear-- but I didn't. My whole plan was to keep the ball in play. To give the crowd a good show, instead of slicing the ball back when PPM smashed it at me, I would lob it up for him so he could smash it again. Smash, lob. Smash, lob. Oohs and has from the onlookers. After three or four exchanges like this, I'd either hit it into the net or give PPM such an easy pop-up that he could make a legitimate put-away on me. I was letting him show off for his fellow clients a little bit. He loved it. The matches were best two out of three, and my plan was to squeak out a win in the second game, then maybe win by just a little more in the third. But when I was ahead 15 to 12 in the second, Ted Simpson caught my eye. He gave a little shake of the head, and then, using his left hand as a shield, gave me a quick thumbs-down with his right. I'm quite sure nobody but Ted and I knew what was going on. I nodded. After all, wasn't putting the client first number one of John Whitehead's 14 Business Principles? The Putnam portfolio manger was very magnanimous in victory-- as i was in defeat. Greg Smith Quit Goldman Sachs After 'Unrealistic' Pitch For $1M [Bloomberg] Earlier: Greg Smith: Goldman Sachs Interns Taught Harsh But Important Lessons By Demanding But Affable Managing Directors; What Else Does Goldman Sachs Have In Store For Greg Smith?; Goldman Sachs Unimpressed By Sophomoric Writing Efforts Of Former Employee; Resignation Letter Reveals Goldman Sachs Is In The Business Of Making Money, Hires People Who Don’t Know How To Tie Their Shoes; Jewish Ping-Pong Tournament Participant / Sixth-Year Goldman Sachs Vice President Is Looking For His Next Challenge; Goldman Sachs Accuser Greg Smith (Might Have) Lied About That Which He Holds Most Sacred

News

Harbinger Capital Has An Interesting Alternative Theory For Why Goldman Sachs Pulled Its Money From The Fund

News

Goldman Sachs Gets Only Endorsement It Needs

News

Why Is Goldman Sachs Holding Its Shareholder Meeting In New Jersey?

News

Goldman Sachs: You Think God Would Let 'Egomaniacs' Work Here?

News

Disgruntled Goldman Sachs Investor Jim Clark's Bloomberg Therapy Session Offers Insight Into Why People Stick With GSAM When It Treats 'Em So Bad