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

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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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