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Fortunately ML/BofA doesn’t have clawbacks

Had it happened at another bank, it could have triggered something nasty.

Alexis Stenfors, a London-based currency trader at Merrill Lynch, has been suspended after allegedly making $400m (284m) loss in the final quarter of 2008, instead of the $120m profit he claimed.

The <a href="https://www.ft.com/cms/s/0/7b1077ac-0a57-11de-95ed-0000779fd2ac.html "Financial Times says the loss would –

‘…cut into, but not erase, the profits of Merrill’s rates and currency operations, headed by David Gu in London.

If the allegations prove correct, Stenfors will undoubtedly lose the bonus he was paid for generating his fictional profit. If they same thing had happened at UBS and possibly Morgan Stanley, RBS, and Citigroup, it could also have triggered clawbacks for deferred bonuses held in escrow for other members of the rates and FX business.

As far as we are aware BofA doesn’t operate such a scheme. And in any case, Merrill bonuses were safely paid out before the merger was finalised. Merrill’s rates and FX team are lucky they don’t work elsewhere.

Comments (5)

  1. Lucky for him it wasn’t the useless Commerzbank which is about to annihilate the toxic waste that was Dresdner Kleinwort

  2. anyone know when Commerz is going to finalise who to keep on and who to let go at Dresdner Kleinwort?

  3. London equity research is de facto gone (all in the press recently), tokyo office may be shut given moves by other banks in Japan, CorpFin in London is apparently about to be eliminated (albeit not everybody to go is the rumour) – all in line with their announcements when commerz took over dk. nyc dk office will surely take a massive hit as well (non-German asset).

    Maybe Commerz is taking some pleasure in not firing the DK bankers as they want them to sweat a bit more and surely looking into how further to minimise their severance packages (suggestion – an annual subscription for value meals at McDonald’s could do the trick).

  4. the severance packages will be as little as 1 months basic salary…..

  5. One month only? I thought min. is 3 months severance, plus one month for each year of service on top for those working longer than 3 years at DK.

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