It’s been a good day for revelatory articles about the lives of financial services professionals. Firstly, the Wall Street Journal has an article about the outrageous happenings in the world of broker entertainment in London. Secondly, the New York Times has a heartfelt piece about Bob Diamond’s new life.
The Wall Street Journal’s article is causing outrage for its portrait of the salacious kickback system that underpinned the Libor scandal. Brokers in London regularly entertain traders to help cultivate their relationships, says the Wall Street Journal. This entertainment can include anything from strip clubs, to prostitutes, to cocaine. The WSJ points to an investigation by the Financial Services Authority which found that brokerage firm Tradition hired prostitutes for traders and took them to, ‘Lady Marmalade Adult Parties’ which take place in a four-bedroom apartment in London with an “erotic love swing”.
Brokers are usually able to claim for such entertainments by submitting inflated taxi receipts, said the Wall Street Journal. One of the traders treated in this way was Neil Danziger, an RBS trader implicated in the Libor scandal. It’s alleged that Danziger asked brokers to help him manipulate Libor and that brokers gave him easy access to lucrative trades and took him to strip clubs and Las Vegas. In return, Danziger gave them millions in commissions.
Separately, the New York Times has been taking subway rides with Bob Diamond as he goes back and forth to Brooklyn to watch basketball games. Diamond is a diminished character. He also seems a bit delusional. “I never did anything for money,” he tells the NYT’s Andrew Ross Sorkin. “The only car I own, honestly, is an 11-year-old Jeep on Nantucket…I think we have lived well, but it hasn’t been about accumulation or anything like that.”
Sorkin, however, points out that Diamond’s current residence is a $37m penthouse apartment on the 40th floor of 15 Central Park West, which he bought under the pseudonym Novgorod to make it seem that he was a Russian oligarch.
Daiwa pays its bonuses in June. It’s increased them by 83%. They’re only $11k per head on average. (Bloomberg)
51 year old Andrew Morton, global head of rates, risk treasury and finance at Citigroup, is the man to watch. (Financial News)
Morgan Stanley has declined to reveal the precise basis upon which James Gorman is paid. (Reuters)
If you’re an MBA who goes to work in an investment bank, your salary is not worth the suffering. (Guardian)
“The advisory business is a capital-light, high-margin business so it fits perfectly with the strategy and the emphasis on enhanced profitability,” said Larry Grafstein, co-head of M&A in the Americas. “I came to UBS because M&A was recognized as a key part of the bank and a growth opportunity.” (Quartz)