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Introducing the Most Frugal Trader of All-Time; A Bloodbath at HSBC

If you close your eyes and think of a stereotypical, high-earning trader, he or she will likely look nothing like Singh Sarao, the man accused of helping cause the “flash crash” of 2010, when more than $1 trillion was wiped off the markets in just 30 minutes. Sarao allegedly made $900,000 that day by “spoofing,” or misleading the market by cancelling huge sell orders that authorities believe he never intended to execute. You would have never known it by looking at him.

A new Bloomberg exposé highlights Sarao’s stunning “pathological” frugality. Despite earning $70,000 on a mediocre day of trading, Sarao continued to live with his parents in their modest home near the airport. His siblings, an optician and an IT specialist who would be lucky to make in a year what he made in a day, matriculated out of their parents’ home.

When asked by a co-worker why he didn’t use his millions to purchase a Bugatti or other pricey European sports car, Sarao, 36, said that he has never owned a car. In fact, he doesn’t even have his driver’s license. His mom would drive him to the train station each day, but never during rush hour. Sarao commuted during non-peak hours to save on train fares. He did the same thing at lunch, waiting until the rush had subsided to save 50 pence on whatever the deli had laying around.

Perhaps the ultimate showing of frugality, Sarao once returned 100 pounds worth of new clothing from a discount chain store after having a bad day of trading. This is all despite the fact that he earned $40 million from 2010 to 2014. Guilty or not, no one can accuse Sarao of being a flashy trader who spent beyond his means.

Elsewhere, HSBC announced its strategy revamp on Tuesday and, with little surprise, it involves massive job cuts. Total headcount may be slashed by as much as 50,000, with half the cuts stemming from the sale of its Turkish and Brazilian businesses while the other half will be straight layoffs. One-fifth of HSBC’s current workforce won’t be employed by the bank come 2017.

Click here for more specifics on the fallout and who will be affected. It appears HSBC’s investment banking and markets businesses will take the brunt of the hit.

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DB Office Raided By Prosecutors (WSJ)

It’s been an awkward two days at Deutsche Bank’s German headquarters. On Monday, there was the fallout from their co-CEOs stepping down. And then on Tuesday, prosecutors raided the bank’s Frankfurt office in connection with a criminal tax-fraud probe likely involving some of its employees.

Piper on a Hiring Spree (Bloomberg)

Sensing blood in the water, Piper Jaffray Cos. is expanding its investment banking team. The firm is poaching dealmakers from Sterne Agee Group, which was acquired last week by Stifel Financial. Piper has already hired five former Sterne Agee investment bankers. It’s also hired four equity sales and trading professionals and eight research analysts in another coup.

Goldman Analyst’s Death Ruled a Suicide (Bloomberg)

22-year-old Goldman Sachs investment banking analyst Sarvshreshth Gupta’s April death has been ruled a suicide. Gupta called his father hours before jumping to his death to complain about his working hours, including pulling two all-nighters in a row.

The CFO Woe (WSJ)

The role of CFO may be a bit overrated in today’s economy. There are the hours, the pressure and the compliance headaches, but job security has also become an issue. With the M&A market booming, CFOs of acquired companies are being shown the door routinely. And there’s a real dearth of CFO opportunities for unemployed chief financial officers.

Drunk, Shrimp-Stealing Lawyer Gives Banker a Lifeline (NY Post)

An ex-Deutsche Bank broker found guilty of tax fraud saw his conviction tossed on Monday after authorities discovered that one of the jurors lied about basically all aspects of her life just to get assigned to the case. “She was actually a suspended lawyer and alcoholic who was once arrested for punching a cop and stealing a bag of shrimp from a convenience store while drunk.” Catherine Conrad also lied about her address and withheld the fact that her husband was a career criminal. However, she used her real name, so give her credit there.

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AUTHORBeecher Tuttle US Editor

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