If a banker keeps passing handwritten notes to his girlfriend, but they’re all addressed to her father, then you know something’s not quite right.
Rather than flirty banter or expressions of love, a technology consultant in Bank of America Merrill Lynch allegedly passed illicit stock tips to the man he hoped would one day become his father-in-law.
Daniel Rivas, a project consultant in Bank of America’s capital markets technology group, had access to a deal-tracking system that contained data about corporate transactions, including impending mergers, acquisitions and tender offers. He allegedly illegally leaked information about “dozens” of unannounced M&A deals on which brokerage controller James Moodhe traded, according to Bloomberg. Prosecutors say that was part of a larger insider-trading scheme involving ex-Morgan Stanley employee Michael Siva and at least four other friends.
Rivas and Moodhe have both snitched on those former friends who are also accused of trading on the leaks, says Bloomberg. The overlapping insider-trading rings made about $5m in profits for the participants.
The indictment alleges: "As the romantic relationship between Rivas and the daughter progressed, so did the frequency with which Rivas and Moodhe spent time together. On dozens of occasions between 2014 and 2017, Rivas divulged inside information to Moodhe, orally and in writing. The defendants took advantage of an insider at an investment bank to make millions in illegal profits, trading more than 50 times in advance of confidential corporate information. The defendants allegedly used code words and encrypted messages to try to avoid law enforcement detection.”
If true, the scheme was especially brazen – some would say stupid – given the years-long government crackdown on insider trading that’s led to dozens of convictions.
BofA Merrill fired Rivas in April and was then hired by RBC Capital Markets, which subsequently suspended him this week.
Rivas didn’t use paper notes with his friends who lived in Florida, instead relying on self-destructing text messages and smartphone screen shots of brokerage accounts. They reportedly turned an initial investment of $100k into more than $2m in just over a year.
Separately, most financial services powers-that-be traditionally have eschewed any public political statements, but now that’s changing, and there’s real danger in disagreeing with the CEO of your firm. That seems like common sense, which is why it’s surprising that a handful of J.P. Morgan Chase employees made critical comments in response to CEO Jamie Dimon’s public stance against the white-supremacist rallies in Charlottesville, Virginia, and President Trump’s reaction to them.
Dimon’s recent memo to bank employees over the disbanding of Trump’s strategic and policy forum, of which the bank CEO was a member, caused a flurry of comments from J.P. Morgan bankers, typically posted with their names, on an internal message board.
As of Thursday morning, only four of the more than 500 posted messages and email responses were critical of Dimon’s actions. That said, the negative remarks garnered a ton of attention, according to the Wall Street Journal.
One of the more critical commenters wrote: “Chase has become extremely political this year and I must be honest and say that others and myself have taken offense to much of it. Trump condemned all hateful actors, as he should have. I have to see this conflict in my private life. I never thought I would deal with it at my workplace.”
Another employee wrote: “Let’s not turn this into a political grandstanding event, and certainly not in our work environment.”
Dimon wrote that he “strongly” disagrees with Trump’s reaction to recent clashes in Charlottesville. “Racism, intolerance and violence are always wrong. There is no room for equivocation here. It is a leader’s role, in business or in government, to bring people together, not tear them apart.”
Honestly, does that really seem like a controversial statement?
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