In January 2012, John Hughes, a former colleague of Kweku Adoboli’s on the ETF desk at UBS, was fired from the bank for gross misconduct for his role in Adoboli’s £1.4bn trading loss. In March 2010, Alexis Stenfors, a former senior proprietary trader on Merrill Lynch's interest rate desk was banned from working in a regulated position for five years in March 2010 after the UK Financial Services Authority said he had been, "deliberately mismarking his positions."
Both men are now doing something completely different. And both purport to be considerably happier. Neither is unemployable per se, but neither is in a position to get back into the market in a trading role. And both are earning considerably less than they were when they worked in banking.
"I'm much happier doing what I'm doing now than I was when I was trading," says John Hughes, who was 29 when he was dismissed after working as a senior trader along with Adoboli on the ETF desk. Hughes now runs BetsofMates, a social 'betwork' in which people are able to bet against groups of friends. "If someone were to offer me a job back in the market now, I wouldn't take it."
It's a sentiment that's echoed by Alexis Stenfors, now aged 41. When he left Merrill Lynch Stenfors reportedly told regulators that he was suffering from mental exhaustion as a result of an "enormous workload and prolonged lack of holiday."
Two years later, Stenfors has just completed a PhD thesis titled ‘LIBOR & the Power Relationship between Central Banks and Banks’ at SOAS, part of the university of London. "Trading can be very short-sighted, and personally I was in need of the complete opposite: time to contemplate," he told us.
Neither Stenfors nor Hughes were willing to discuss the circumstances of their dismissal. However, it will be three years before Stenfors’ FSA ban expires. Hughes said he’s not aware of being banned by the FSA and the FSA Register shows that the regulator took no action against him. However, one regulatory partner at a law firm (who declined to talk on the record because he works with UBS) said the FSA is taking an increasingly harsh line with anyone dismissed for performance reasons and that being dismissed for gross misconduct would make it very difficult for Hughes to get back into the market.
Both Stenfors and Hughes should provide some solace to the 20 or more traders implicated in the Libor scandal, for whom getting back into the market is going to be a struggle. Simon Head, head of fixed income at Correlate Search, said banks are being extremely scrupulous when it comes to interviewing anyone who’s worked at a bank implicated in the Libor scandal. “They’re looking at where a person has worked previously and are double and triple checking that the person hasn’t had any involvement in the Libor issue.”
The head of fixed income recruitment at one European bank told us she had been given instructions not to interview anyone from rates desks at Libor-implicated banks (including individuals still employed there).
The good news for ex-Libor traders is that Hughes and Stenfors said life beyond trading is really not so bad. Hughes said the trading floor is so all- encompassing that when you're in it, it's difficult to conceive of a life beyond.
"I would never want to replicate the intensity that a daily market brings in another environment," he told us. "There's no cut-off point - even when you're at home you're checking what America is doing and getting up at 3am to see what's happened in Asia. You can't see life beyond work or beyond London. If you go out in the City on a work night, all you will hear is people talking about the markets. It's as though they never leave the floor."
Nowadays, Hughes lives in Leeds - something that would never have been possible previously. "Suddenly, you're free - you don't have to live within an hour of London," he said.
Stenfors spent fifteen years on the trading floor and said he expected the transition away from trading to be much more difficult than it has been: "Academia has been very welcoming in many ways, and I have had much more time for family and friends than before."
A long trading career can also lead to an excessive narrowing of focus, said Stenfors: "Personally, I became very specialised after so many years in trading. Returning to academia has meant I've had to broaden my mind very quickly. You are there to learn first, and then maybe become an expert on your topic. This takes time, and it requires being humble and receptive."