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Morning Coffee: Enormous profits of arrogant 35 year-old trader. Hiring mistake at Credit Suisse

Jonathan Hoffman Barclays

$15m of these over a five year period

If anyone gives ‘bankers’ a bad name, it is surely Jonathan Hoffman, a now-42 year-old ex-Barclays rates trader and the former head of global rates at Lehman Brothers. Despite being paid $83m (£55m) to join Barclays when it purchased Lehman’s core business in September 2008, Hoffman is adamant that he is still owed $83m from Lehman Brother’s Holdings for work done earlier that year, and he’s taking Lehman’s carcass to court in an attempt to extract his dues.

Hoffman’s argument is that the $83m allocated to him by Barclays was to persuade him to join the British bank and not to compensate him for the money he left behind at Lehman. Like Sonia Pereiro-Mendez, the ex-Goldman trader who used covert films to extract an out of court settlement from the US bank last week, Hoffman made a secret recording of the negotiations he had with Barclays. In this recording, Hoffman is reportedly heard talking to Rich Ricci, Barclays’ then COO, and expressing surprise that his Lehman contract wasn’t being “made whole.”

Recording or not, few people are likely to have much sympathy for Hoffman, who is already a very wealthy man. He was allocated $65.5m in pay by Lehman between 2005 and 2007 alone. Hoffman, however, considers his outlandish pay valid in light of the enormous profit he made for his employers. In 2008, aged just 35, he generated $550m of Lehman’s profits. And between 2009 and 2014, he claims to have made $1.25bn in profits for Barclays. In the circumstances, Hoffman says he was such hot property he could have joined a hedge fund like Citadel or Millennium and that Barclays’ $83m was simply to get him on board. Cue tiny violins.

Separately, anyone hired by Credit Suisse in 2010 has reason to feel slightly concerned. In a farewell speech at Credit Suisse’s annual investor meeting, outgoing CEO Brady Dougan said it had been a mistake to expand Credit Suisse’s investment bank in the wake of the financial crisis. “In retrospect…I should have been more cautious about expanding the business early in the post-crisis rebound,” Dougan confessed. Between 2010 and October 2011, Credit Suisse’s investment bank expanded by 1,500 people. That number and more have since been let go, however.

Meanwhile:

Christian Bittar, the Deutsche LIBOR trader who earned a $136m bonus for 2008, sent some inappropriate messages, allegedly. (Bloomberg)

Brady Dougan cautions against slashing Credit Suisse’s investment bank too vigorously. (WSJ) 

Deutsche’s investment bank did very well in terms of revenues, but a lot less well in terms of profits, which fell as a result of legal charges. (Reuters) 

SocGen is cutting senior traders in London. (Bloomberg) 

Only $69m of the $3.6bn tax on profits paid by HSBC last year feel within the UK. However, HSBC paid a UK bank levy of $1.1bn and this will rise to nearly $2.3bn if a Labour government is elected.  (Financial Times) 

Navinder Singh Sarao is an insomniac who didn’t usually sleep until 4am. (Independent) 

Only three banks: Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley, added positions over the first three months of 2015. (Bloomberg) 

One third of the assets in the hedge fund industry are managed by firms where the founder is over 60 (or even over 70 in some cases) and another third of assets are managed by founders in their 50’s. (Forbes) 

Why bankers hate non-doms. (Spectator) 

How to lead like a hipster: conform while pretending not to. (Management Today) 

Quantify the likelihood of a stress-induced breakdown in the next year. (Twitter)  

Personalize your emails using an algorithm based upon recipients’ past communications. (Wired) 

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