Divorce lawyers see Wall Street bankers as ‘targets’
Getting divorced is, quite obviously, an expensive habit. If you work in banking, it’s even more so. And it may only get worse.
CNBC put together a new piece centered on the divorce proceedings involving Sage Kelly, the once all-star investment banker at Jefferies who was forced to resign following one of the more public divorce settlements in recent memory. Kelly’s estranged wife, Christina, charged the now ex-healthcare banker – and his colleagues – with being drug addicts and philanderers, along with a host of colorful and shame-inducing anecdotes.
Her accusations, made in legal filings available to the press, went viral, forcing Kelly to resign and Jefferies to reportedly lose business. The couple ended up resolving the matter with Christina earning joint custody of the kids and, assumingly, a decent monetary settlement. She later recanted many of her accusations and blamed "inaccurate, untrue or hyperbolic" media coverage.
Lawyers told CNBC that Kelly’s case, and other similar ones to make headlines this year, may have set a precedent. Bankers are typically rich private people who work for and with public companies, making them targets for front-page headlines, particularly following the economic collapse that sullied the reputation of the banking industry.
"The Wall Street guys are targets, no question about it," matrimonial attorney Sy Reisman told CNBC. "Now that one or two people broke the seal, it's becoming easier to write these types of stories,” added Jacqueline Newman, who suggested that media coverage and public interest provide immense leverage in situations like Kelly’s. We could be seeing the beginning of a pattern.
Meanwhile, Jefferies made news elsewhere, and again for all the wrong reasons. The firm, which just booked a miserable fiscal fourth quarter, saw its former managing director convicted of fraud sue the man that turned him in. Jesse Litvak claims that the prosecutor’s star witness, AllianceBernstein’s Michael Carter, used “wrongful, unfair or improper means” to derail his career.
Jefferies needs 2015 to get here in a hurry.
There may be a slightly smaller comp pool at most private equity firms as the industry has succumbed to pressure from investors and regulators on the fees it collects. Many are reimbursing investors on “transaction and monitoring fees.”
Seven years of litigation proved worthy for Sunny Tadjudin. A judge agreed that the former Bank of America distressed-debt banker was indeed fired back in 2007 so the firm and her manager could avoid paying out her bonus. But she is receiving just $500,000, far less than the $3.7 million she requested.
Connecticut’s Bridgewater Associates is the biggest hedge fund in the world, despite not launching a new fund since 1996. Well, that stopped last week. The firm just launched an “Optimal Portfolio” fund that will include shorts. The 1,400-person company could grow as a result.
Morgan Stanley analysts are down on GoPro, though that may be because they tried out the camera system while making a two-minute video wrap-up of their own workday. Maybe their job is just more boring than say a surfer?
The New York Federal Court ordered MF Global Holdings to pay $1.21 billion in restitution fees for using customer funds without their knowledge. The now defunct firm was also fined $100. Yes, you read that right.
The list of the highest-paid hedge fund managers for 2014 isn’t shocking. Bill Ackman, Larry Robbins and Dan Loeb had a stellar year. A few other names didn’t do so well, though.
One big loser is former Wall Street analyst Meredith Whitney. She launched her own hedge fund last year, but it’s down 11% this year despite strong market conditions. Now, her biggest investor, Michael Platt’s BlueCrest Capital Management, is suing her after not receiving the $46 million stake that it asked to be redeemed in October.
The J.P. Morgan security breach could have conceivably been prevented if the bank utilized a rather simple double authentication system for all of its servers.
Buzz Around the Office
Here’s another friendly reminder to not be that guy or girl at the office party. A 32-year-old Utah man shattered his company’s record at its annual eggnog chugging competition and then spent three days in the hospital with a lung infection.
Quote of the Day: “At first I was afraid, I was petrified. When OPEC didn’t cut and oil prices began to slide/ But then I spent so many nights thinking how the Saudis did us wrong, and I grew strong, and I learned how to scrape along.” – a Wells Fargo analyst on the oil crash in a rewrite of Gloria Gaynor’s disco anthem “I Will Survive.”