Morning Coffee: Trader fired for tiny loss gets revenge on French bank. Goldman Sachs wants to keep things loose

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Morning Coffee: Trader fired for tiny loss gets revenge on French bank. Goldman Sachs wants to keep things loose

It's a long time ago now, but if you're blessed with a memory for the minutiae of the banking industry over the past decade, you might recall the time a trader was sacked in 2013 for what seemed to be a 'fairly negligible' $19m loss made the previous year. That trader has finally been avenged.

His name is Lionel Crassier and these days he seems to have successfully reinvented himself as the sort of Zurich-based software/algorithm consultant that most equities traders might aspire to become. In 2012, however, Crassier was an equities trader running U.S. equities in New York for BNP Paribas when he got a bit ahead of himself and built an overnight trading position of 65,000 mini futures that exceeded his €100m overnight limit and which generated the loss that eventually got him fired.

BNP's first reaction wasn't to let go of Crassier entirely though. As press reports from the time made clear, the bank's first course of action was to "abruptly" recall Crassier from New York to Paris for "poor trading judgement." It was only after transplanting him to the French capital that BNP subsequently decided to let go of Crassier altogether after 19 years with the bank. Colleagues in Paris told the Financial Times they simply found his office closed one day and were told he'd left to attend meetings. Crassier later returned for a leaving party, but none of the senior managers attended. 

In its dismissal letter, BNP accused Crassier of "poor analysis and a flagrant lack of vigilance" for his focus on the volume rather than the value of his positions and for his failure to monitor his positions' value in real time. Crassier hit back with a court case saying that he was unfairly fired and that BNP Paribas had made it impossible for him to work in a field he was "passionate about."

Last week, Crassier won that case in a court in Paris. He'd wanted €3.5m and he only got €1.3m, but nearly eight years after the event it's vengeance of sorts. Crassier can also console himself with the thought that he seems to have got out of equities trading at the right time. There are plenty of other ex-equities traders who'd like to be digital consultants based in Switzerland - BNP may have given him just the nudge he needed. 

Separately, Goldman Sachs' heavily-trailed investor day 2020 presentation has been seen in public again. The Financial Times reports that next year's new strategy won't have actual profitability targets. Instead, it says Goldman wants to focus on a “through the cycle” measure of profitability and return on equity that sounds a bit like the sorts of through-the-cycle fiscal rules governments adhere to when setting budgets.

Who will define which part of the cycle Goldman is at? Presumably, it will be GS itself, meaning the new rules could give senior management considerable leeway in defending what might otherwise be construed as under-performance.

Meanwhile:

BNP Paribas might be laying-off 250 of its 1,400 employees in Geneva as it accelerates technology investments and needs fewer employees. (FiNews) 

Deloitte sacked David Joseph, a Zurich-based forensic services and financial crime partner for what it says were “serious and sustained concerns as to his conduct and judgment.” Joseph is challenging his sacking in the UK high court. He was one of the highest performing partners at Deloitte in Switzerland and worked on a project that brought in $201m in fees over several years. (Financial Times) 

Morgan Stanley lost up to $140m after securities related to a Turkish lira trade in 2018 and early 2019 were mismarked. Scott Eisner, a 2014 Yale University graduate and associate seems to have handled that portfolio on a day-to-day basis. (Bloomberg) 

Beware working for a boutique focused around one key individual: Ondra partners is sacking 25% of its staff as co-founder Michael Tory is ill. (Financial News) 

Hedge fund Marshall Wace made £258m in profit in the year to February 2019. That was shared between 17 partners. (Guardian) 

A Hong Kong hedge fund rented an office across the border in China after its Chinese staff suffered abuse during their commute. The new office has a panic room. (Financial Times) 

You can see an artist's impression of JPMorgan's new New York office here. (NewYorkImby)

A billionaire ex-Morgan Stanley banker who says, "It was really tough, the culture of all-nighters," also explains why time in banking is valuable. - You get to meet some amazing people who will help the rest of your career. (Financial Times)

Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

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