The curious case of Navinder Singh Sarao, the 36 year-old trader under arrest for allegedly precipitating the ‘flash crash’ of 2010 is helping to focus attention on the big money that can be made in the UK’s so-called ‘prop trading arcades’.
The Telegraph reports that that Sarao started his finance career in the back office of an unspecified major bank. Dissatisfied with that work, Sarao quit to join Futex, the Working-based trader training arcade, where he remained for five years between the ages of around 24 and 29. Former colleagues of Sarao at Futex describe him as a “legend.” “There was this one day when the market was just collapsing…he just stood in the way, put in his bids, bought up the market and went home and went to sleep,” said Miltos Savvides, who still works at the trading firm; the next day, Sarao was reportedly $13m up.
Another former colleague said there were several days on which Sarao made £250k and that he made ‘up to £4m in six months’ at Futex in his 20s. “People were in awe of him and his brain,” said one. Not everyone does so well at the so-called prop shops, however: some of his colleagues were reportedly struggling to earn £500 a week.
Separately, Barclays investment bankers have reason to fear the arrival of John McFarlane, the bank’s new chairman, from Aviva. The Telegraph reports that McFarlane is being heralded as an axeman at Barclays and that he himself has promised expedite the bank’s restructuring. Something needs to be done; as the Financial Times points out, the return on equity at Barclays’ investment bank was 2.7% in 2014.
There are 1,000 people working in trading arcades in London. (WSJ)
Deutsche Bank inadvertently destroyed 482 telephone messages related to the LIBOR case and took two years to produce some of the evidence the FCA requested. (Financial Times)
How traders speak in London: “Could we pls have a low 6mth fix today old bean?” (Reuters)
“One division at Deutsche Bank had a culture of generating profits without proper regard to the integrity of the market. This wasn’t limited to a few individuals but, on certain desks, it appeared deeply ingrained.” (Reuters)
‘Senior’ 35 year-old credit derivatives trader is leaving J.P, Morgan for a hedge fund after 14 years. (Bloomberg)
You will not be extradited to the US if you’re a Spanish banker who retreats to Spain. (ABC News)
Credit Suisse keeps hiring FIG bankers in the US. (Reuters)
28% of Blackstone’s interns are female, but only 19% of its analysts and associates are. (WSJ)
People with personality used to work in ECM: “People who were very vocal, very passionate, and lived through the heyday of the late 90s and early noughties.” (Financial News)