Morning Coffee: The happy life of the ex-Deutsche CEO luring bankers with $10m pay packages. Chaos at BofA?

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Young Business Children Make Faces Holding Lots of Money

On paper, Anshu Jain and Howard Lutnick make for a bit of an odd couple. Lutnick, who has essentially run Cantor Fitzgerald since he was 29, is known to be outspoken and unafraid to ruffle a few feathers. The former co-CEO of Deutsche Bank, Jain is soft-spoken and well-traveled, holding a number of roles at several different firms throughout his career. Yet after only 18 months co-manning the helm at Cantor Fitzgerald, Lutnick and his number two in command appear to have developed quite a partnership – one that has put the firm on an aggressive and disruptive growth path.

Lutnick, Cantor’s longtime CEO who lost two-thirds of his staff – including his brother – during the terrorist attacks on September 11th, admitted to Bloomberg that he’s “been lonely” and “wanted a partner.” Adding Jain, who resigned from Deutsche Bank in 2015 amid scandal, seemed to fix what was ailing him. The two are said to be extremely close, with their relationship extending beyond the walls of the office. The pair and their wives vacationed together this summer and speak every day, even when Jain is in London.

Inside the walls of Cantor Fitzgerald, Lutnick and Jain are pushing the envelope, expanding the firm’s presence in the highly-competitive worlds of prime brokerage and advisory while also growing in sectors like healthcare, real estate, and power and alternative energy, according to the report. Add that to firm’s burgeoning trading business and it’s clear that Cantor and its 1,300-plus employees are pushing full steam ahead while larger banks are paring down some business lines.

Cantor has reportedly offered pay packages north of $10 million to poach bankers from larger rivals, including an entire team from Jefferies to launch a power and renewable-energy franchise. The firm also took an aggressive line by hiring Sage Kelly as its head of investment banking. Kelly resigned from Jefferies in 2014 after making major headlines when his ex-wife accused him of committing some of the more salacious acts you’ll read about, all of which he denied. But Kelly’s exit seemed to have a ring of finality to it, until Cantor came calling over a year later.

Lutnick and Jain both know a thing or two about handling controversy. Cantor has been sued on multiple occasions, including by former employees, while Jain left Deutsche Bank just a month after the German lender agreed to pay a record $2.5 billion fine for rigging Libor rates. Either way, the two appear to be content in their current position as “the biggest little guy” on the Street.

Elsewhere, Bank of America’s issues may extend well beyond Christian Meissner, the head corporate and investment banking who is leaving the firm. Reports suggest that internal tensions over the bank’s appetite for risk – or lack thereof – may have led to his departure. Meissner’s exit comes three months after rumors began to circulate that BofA’s M&A bankers were upset with the firm for passing on potentially lucrative deals in emerging markets and scrapping “years-long” plans to expand key lines of business within its investment bank. Additional executives are weighing leaving the bank due to its risk-averse strategy, according to Bloomberg. It’s possible Meissner is just the first piece to fall.

Meanwhile:

Incoming Chief Executive David Solomon is certainly making his presence felt, despite not even technically owning the CEO title for another 10 days. The latest shakeup is the departure of the bank’s equities trading head, Paul Russo, who is said to be negotiating his exit. He’s the latest senior trader to be shown the door since Solomon was named CEO. Russo started at Goldman as a summer intern in 1989. (WSJ)

Wells Fargo plans to cut as much as 10% of its global workforce over the next three years, resulting in the loss of as many as 25k jobs, mostly in retail. (CNBC)

The group that’s trying to oust HSBC global banking boss Robin Phillips reportedly contacted more than 60 senior bankers at the firm before sending a scathing letter to the group's chairman, chief executive and board, demanded he and his management team be dismissed. (Financial News)

Lawyers for two former Deutsche Bank traders accused of manipulating Libor rates have put together an interesting defense: the rules regarding rate submissions at the time of the accused rigging were unclear. (Bloomberg)

Former AllianceBernstein chief executive Peter Kraus has launched a new asset management firm based on a novel concept. It will only charge higher fees if its funds beat the overall market. Employees will be paid based on how they performance against passive index funds. (WSJ)

Danske Bank Chief Executive Thomas Borgen has resigned following a lengthy investigation into money laundering practices at the Danish bank. (WSJ)

French regulators have introduced a proposal that will strengthen MiFID rules and make it more difficult for U.K. banks to conduct business in the EU post-Brexit. (Bloomberg)

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