Morning Coffee: Days of Our Libor: A Soap Opera
We’ve talked plenty of Libor lately, but the scandal is just too juicy to pass over. The final settlement total is what we’ve been hearing – roughly $1.5 billion – but that’s not the notable news. We now know why it’s UBS, not Barclays, that’s getting hit the hardest. Employees at the firm weren’t just massaging interest rates; they were offering other brokers cash payments to take part in the scheme.
Dozens of UBS employees, primarily those located in the firm’s Japanese subsidiary, offered as much as $100,000 to inter-dealer brokers to help manipulate interest rates in the bank’s favor, according to emails obtained by The Wall Street Journal. The correspondence between UBS employees and the dealers is as embarrassing as it is brazen. Plenty of expletives and old boy's club chatter. And what’s worse: UBS senior managers were aware of what was going on.
In related news, Financial Times is reporting that in 2008 U.S. Treasury Secretary Tim Geithner, then president of the Federal Reserve Bank of New York, grew suspicious of faulty Libor reporting. At that point, the New York Fed believed the rate manipulation was meant to make the banks appear stronger financially, according to FT, not necessarily to generate revenue.
Geithner is making plenty of news himself. Rumors are beginning to percolate that he could be in line to replace Federal Reserve chairman Ben Bernanke when his term is up. Who will replace Geithner come next year is also a heated debate, with American Express chief executive Kenneth Chenault the latest name to join the rumor mill.
Two former UBS traders – Tom Alexander William Hayes and Roger Darinwere – are facing felony charges for their involvement in the Libor scandal
Should’ve Taken the Train (Business Insider)
Prosecutors may have dropped assault and hate crime charges against former Morgan Stanley investment banker William Bryan Jennings for allegedly attacking a cab driver, but that doesn’t make him free and clear. The firm fired Jennings in October, and is now going after as much as $5 million he feels is owed to him.
SAC Capital Advisors founder Steven A. Cohen has eluded insider trading charges while watching those close to him get indicted. With a couple guilty verdicts, prosecutors may soon have the leverage to go after the big fish.
Knight Merger May Cost Jobs (WSJ)
Knight Capital, which two months ago lost $440 million due to an embarrassing computer-trading glitch, announced its intention to merge with electronic trading group Getco. Layoffs are likely to ensue as the two firms eliminate redundancies.
Shareholders Trump Employees (Bloomberg)
The world’s nine largest global investment banks announced more than 30,000 job cuts in the first three quarters of 2012. The Standard & Poor’s 500 Financial Index, meanwhile, is up 27 percent on the year. The cuts are working.
Worst Places in the World to Be Laid Off (eFinancialCareers)
With layoffs a consistent trend in 2012, you might ask yourself where in the world is the worst place to lose your job? The answer, according to our research, is the U.S., swiftly followed by Switzerland.
Buzz Around the Office
Random Acts of Kindness (Buzzfeed)
A revolution inspired by the courage of those who lost their lives at Sandy Hook Elementary School is sweeping the globe. It’s called 26 Random Acts of Kindness, and it’s awesome. Here are a few examples.
List of the Day: Body Language
It’s not always what you say in an interview; often it’s how you act.
- Strive for palm-to-palm contact on all handshakes.
- Keep your shoulders back and down.
- Stay grounded; don’t fidget.