As some of you may recall, there was a time not too long ago when you could work on Wall Street and be compensated in a way that made you feel special. Appreciated. Loved. Eight, nine, ten-figures of love. Now, obviously, not so much. But that is not what's eating the industry's most fragile spirits of late. They are fine taking pay cuts. They could care less about the money. What they're not fine with is having the rush, the intensity, the adrenaline-pumping fear that comes with, say, putting on a trade in which maybe the firm will make $1 billion or maybe it'll lose $10 billion, WHO KNOWS, IT'S ALL RELATIVE, I CAN'T FEEL MY LEGS, THAT'S WHAT MAKES IT SO EXCITING taken away from them. Take Sean George. He used to spend his days destroying company property and now, thanks to financial regulation, has had to get his kicks elsewhere. Sean George kneeled in the Church of St. Paul the Apostle in Manhattan. He wasn’t praying. A gash below his right brow bled into his eye and down his nose before a knee to his groin sent him to the floor. George, 39, head of credit-derivatives trading at Jefferies, was making his Muay Thai debut at the church June 22 in a sport that allows kicking, elbowing and kneeing. His eye was swelling shut by the time he lost in a split decision. It was the happiest he’s been all year, he said. “Right now at work I’m making less risk decisions -- and I enjoy taking risks,” George, who headed investment-grade credit-default-swap trading at Deutsche Bank AG before he joined Jefferies last year, said in an interview. “If you’re in it for the game and the fight, the game’s over and the fight’s over.” Risk is what drew George and the colleagues he respects to Wall Street, he said. He could bring in millions of dollars in a single month at his peak, and trading was so intense that during one credit-default-swap deal he smashed a phone against his desk, sending part of it three rows away, “one of the records for the best break,” he said. Ethan Garber's lost that tingly feeling in his plums. “There’s no sexiness, there’s no fun, there’s no intellectual intrigue, either,” said Ethan Garber, who ran proprietary credit-arbitrage portfolios for Credit Suisse Group AG and Bear Stearns Cos. “A lot of my friends who actually lingered for the last four years are all now getting fired anyway,” said Garber, 45, currently CEO of IdleAir, a Knoxville, Tennessee-based firm that provides electricity at truck stops. “The air is taken out.” Robert McTamaney has been reduced to doing his best impression of a whiskey-swilling, cigar-chomping newspaper man from the 1940's, who we assume addressed Bloomberg's Max Abelson as "toots" here. “The socks are higher, the skirts are longer,” said McTamaney, who helped run Goldman Sachs’s equities- trading business in Asia. “It’s like styles: They change, and you’ve got to change with it or be left behind.” Former King Street Capital and Bank of America trader Sam Polk isn't gonna lie, the worst part of Wall Street 2.0 is not being able to feel like a god by dropping $10,000 for bottle service on Wednesday nights, and sometimes even Thursdays. “You could be a 20-something trader three years out of school, able to go to any restaurant or club or ballgame on any night that you wanted, and it was totally paid for,” he said. “It was a tremendous feeling of power.” Michael Meyer is dying a slow, painful death. “The light at the end of the tunnel is dim,” said Meyer, now co-head of sales and trading at New York investment bank Seaport Group. Clearly, it's not pretty. But here at Dealbreaker we're about offering solutions, not whining about problems. How can these guys and girls replicate the feelings they once got by taking on risk on the job, if, unlike Sean George, getting kicked in the balls is not their thing? Drinking the carton of milk in the break room that's been sitting out for two days, telling the boss's wife it looks like she's gained a couple pounds, having unprotected sex with a junkie, shouting "You go girl!" at yourself in spin class after being kindly told to "Shut the fuck up" or else, and leaving dirty dishes in the sink all seem like good jumping off points but we can do better. These people need our help. Bloodied Trader Pines For Risk As Wall Street Retreats [Bloomberg]

[caption id="attachment_99794" align="alignleft" width="260"] No jurisdiction can hold me.[/caption] Hedge fund manager Phil Goldstein once said that when Massachusetts Secretary of the Commonwealth Bill Galvin looks in the mirror in the morning, he sees Eliot Spitzer. Granted, he said this before certain aspects of Client Number Nine's private life hit the front pages, but the point was made. And while Spitzer moves from one failed media venture to another—undoubtedly paying very close attention to a certain South Carolina House race—Galvin still carries the torch and a copy of the Bay State's securities law. That law must be unusually broad, because he's used it to fine a German bank $17.5 million for naughtiness related to a CDO created with an Illinois-based hedge fund.

You know those letters that go out from banks and brokerage firms a couple days after a financial disaster has hit the news? They usually begin with “Dear Valued Customer,” and they assure freaked-out investors that that sort of thing would never happen here. Like this one, published November 1, 2011, the day after MF Global filed for bankruptcy. “Dear PFGBEST customers,” it began. Those rogues at MF Global might have lost track of a billion dollars or so of their customers’ money, but PFG clients could count on “the absolute dedication of PFGBEST to protect you and your PFGBEST accounts.” The soothing dispatch was signed by Russell Wasendorf, Jr., president and chief operating officer and son of the CEO Russell Wasendorf, Sr. It pledged that PFG was “compliance-focused,” and said the principled firm was in communication with regulators “to assist in any way” after the purloining of MF Global’s clients. Well, you can’t argue that the senior Wasendorf didn’t assist his regulators. The CEO of PFG Best, aka Peregrine Financial Group, even sat on an advisory committee of the National Futures Association. On that “compliance-focused” part, though, the your-money-is safe-with-us vow didn’t turn out to be so reliable. Eight months after the “Dear customer” letter, PFG filed for liquidation under Chapter 7 of the U.S. Bankruptcy Code on July 10 -- a day after the NFA said the Cedar Falls, Iowa futures brokerage firm was short about $200 million in its customer accounts. That would be the same NFA whose board had on three occasions – in 2004, 2007 and 2009 -- voted to put Wasendorf, Sr. on its Futures Commission Merchant advisory committee that weighed in on new rules. NFA spokesman Larry Dyekman declined to comment. Russ Senior today is in the Linn County jail in Cedar Rapids, Iowa, having been charged with making false statements to regulators about the value of his customers’ accounts. His bail hearing is on Friday. Junior hasn’t been accused of wrongdoing and his lawyer told The Wall Street Journal that the younger Wasendorf is cooperating with regulators to track down assets. Neither man’s lawyers returned phone calls. The elder Wasendorf tried to commit suicide on July 9 and left a note saying he’d been stealing from customers for 20 years. “I had no access to additional capital and I was forced into a difficult decision,” he wrote. “Should I go out of business or cheat?” Well, we know the answer to that one. During the years he was dipping into customers’ funds, Wasendorf was honored with awards for his charity, his patriotism, and his devotion to green initiatives. The firm received accolades, too. Last year, it was among 13 winners of the “Iowa Character Award.” Spokeswoman Amy Smit of “Character Counts in Iowa” said in an email that PFG won for its “extensive community involvement,” including research for pediatric diseases and support to tornado victims. Futures magazine called it “one of the nation’s Top 50 Brokers” for 13 years in a row. Ginger Szala, group editorial director at Summit Business Media, which publishes Futures, said in an email that the list is based on “customer equity reports” that the magazine gets from the Commodity Futures Trading Commission. The CFTC gets those from the firms. “We rely on the regulator to confirm the amount as accurate, and of course, that now is under question,” she said. Oh yeah, that. We could take a little comfort if it had all come as a surprise – the cagey guy who’d never given the regulators a clue. No such luck. While he was picking up his trophies over the years, Wasendorf was running companies that waved red flags. He owned a securities firm, Peregrine Financials & Securities Inc., that first registered with Finra in 1998. That firm wound up terminating its registration in June of 2004, just two months after Finra fined it $251,000 for “unfair and excessive” commissions and for failing to keep proper records of emails. A year before that, in February of 2003, Finra said Peregrine had filed inaccurate reports and had failed to maintain the minimum required net capital. Peregrine also lost arbitrations with customers in 2001 (for breach of contract) and 2004 (for misrepresentation and “fraudulent activity.”) His separate futures trading company, PFG, had its own set of problems. In 2009, an administrative law judge said it had failed to investigate numerous questionable activities in the account of a 73-year-old retiree, adding that PFG had shown “a reckless disregard” for its duties. Ten years before, the Commodity Futures Trading Commission said the firm had failed on several occasions to report that it had fallen below minimum financial requirements, and that it had been showing receivables as current assets in its reports to the regulator. There is more, but you get the idea. Wasendorf thought regulators were kind of dumb, and while he may be a big-time liar, you can’t argue with him on that one. It was “relatively simple” to trick regulators, he said in his suicide letter. At a hearing of the House Committee on Agriculture Wednesday, amid talk about how to prevent future MF Global and Peregrine-style fiascos, witnesses from the financial industry made the familiar business lobby pitches that regulations can kill competition, stifle innovation, and lead to firms leaving the futures business altogether. The carrying on could almost have been scripted by Wasendorf himself. When the CFTC was proposing increased margin rules for foreign exchange traders in 2010, Wasendorf said in a press release that the changes would send thousands of U.S. jobs overseas. “Congress made it clear that the industry was to be policed, not abolished,” he said at the time. Even if this guy gets stuck doing a couple years in prison, there’s got to be a financial lobbying job in his future. Susan Antilla is a columnist for Bloomberg View.