Steven Cohen has done almost everything that he can to keep top traders from jumping ship as SAC Capital is rebranded into a family office. His recent efforts include increasing bonuses and hiring a “Super Duper Weenie” hot dog truck to stop by the office. So far, his attempts at limiting turnover have failed more often than they’ve succeeded, so Cohen is putting away the honey and bringing out the vinegar.
Just days away from learning whether the firm’s insider trading plea deal is approved, Cohen is reportedly demanding portfolio managers sign new two-year employment contracts that would keep them at SAC – soon to be renamed Point72 Asset Management – until 2016, according to Dealbook. Many are leery of signing the deals.
In addition, Cohen has threatened to sue traders who left before their existing contracts expired. Several departing portfolio managers have agreed to forfeit deferred compensation and have delayed start dates at their new firms to avoid litigation, according to the report. Within the last few months, more than a dozen high-ranking staffers have jumped ship to rival firms, namely BlueCrest Capital Management and Moore Capital Management.
The concern for Cohen isn’t just losing veteran SAC employees. Unlike in previous years, he can’t just backfill the positions by recruiting from other firms, due both to SAC’s floundering reputation as well as the outstanding civil suits facing the company and Cohen himself. Recruiters told Dealbook that the firm is essentially handcuffed from recruiting senior portfolio managers, though it may be adding junior traders.
The Real Losers of the War on High-Speed Trading (eFinancialCareers)
If authorities make high-speed trading illegal, there will be significant fallout for market participants, but don’t expect the days of old school trading to come back en vogue.
Networking Dos and Don’ts (eFinancialCareers)
Here are the eight golden rules of networking from here until 2020, courtesy of EY.
Masters Leaving JPM (Bloomberg)
Blythe Masters, J.P. Morgan’s longtime commodities chief, is leaving the bank after 27 years. While the move is said to be voluntary, Masters’ position became somewhat expendable after the bank decided to sell its physical commodities business early this year.
Goldman Pitching Market-Making Unit (Reuters)
Goldman Sachs is on the verge of selling its NYSE market-making unit to Dutch firm IMC Financial Markets. No word yet on any headcount ramifications, but much of the work is done electronically now anyway.
Future CEO? (Bloomberg)
Wells Fargo Chief Financial Officer Timothy Sloan is reportedly being groomed as a potential successor of CEO John Stumpf. Sloan is being transitioned into the head of wholesale banking, which will give him experience as the head of a large business line.
IPO Delay (NY Times)
With all the recent hysterics, high-speed trading firm Virtu Financial has decided to delay its initial public offering. Probably a good idea. The FBI is currently soliciting traders to blow the whistle on front-running.
‘Derelict’ of Duties (WSJ)
The widow of Zurich Insurance finance chief Pierre Wauthier blasted the firm during the company’s annual shareholder meeting for what she believes was a lackluster investigation into his suicide. In a note found near his body, Wauthier blamed the company’s former chairman for creating an unbearable work environment, but a following investigation cleared all company leaders.
Buzz Around the Office
Latte From Hell (The Advertiser)
Starbucks was forced to apologize to a Louisiana schoolteacher after employees drew Satanic symbols in her coffee foam.
Quote of the Day: “There are no 4s, 9s, there are no queens in the deck. Only you will know that. And we will pay some tour group operators to bring a bunch of dumb tourists in to play with you.” – Michael Lewis with an analogy for high-speed trading