Morning Coffee: Ex-senior banker with links to top models and marijuana ends up in court. Citi's mitigating statement
When people complain about the financial crisis a popular refrain is that no bankers ended up in jail, except in Iceland. In the UK, this could soon change. John Varley, Roger Jenkins, Tom Kalaris and Richard Boath - Barclays' former chief executive, head of the Middle Eastern business, head of wealth management, and head of corporate finance respectively - yesterday arrived at a criminal court in London to face charges of fraud by false representation relating to Barclays' raising of £6.1bn of capital from Qatari investors during the financial crisis.
The four men are pleading not guilty. The Financial Times notes that Varley is the most senior banker ever to face a criminal court charge (at least since 2008). Boath, in particular, has claimed to have "repeatedly raised concerns about the decisions taken by the bank with both senior management and senior lawyers," and to have been "reassured that those decisions were lawful." Kalaris has been living in upstate New York since 2016. Jenkins has been hanging out in Malibu, California.
Of the four, Jenkins is by far the most colourful. Now aged 62, he married a Brazilian model in September last year, having previously been associated with the likes of Miss Venezuela and supermodel Elle Macpherson. In 2016 Jenkins was said to be investing in a fund acquiring land in California to set up a marijuana business. At Barclays, Jenkins was for many years head of the controversial structured capital markets business, which devised structured products for clients that helped 'mitigate' their tax exposure. In 2009, the Guardian wrote an exposé on the business, calling Jenkins - who allegedly earned £40m ($52m) a year for his efforts - one of the best paid men in Britain. In 2005, Financial News says Jenkins earned £75m, making him the best paid person working for a FTSE 100 company.
Jenkins left Barclays in 2009 and Barclays closed its structured capital markets business in 2013 as part of a strategic review. "Although this was legal, going forward such activity is incompatible with our purpose. We will not engage in it again," said then-CEO Antony Jenkins (no relation) at the time of the closure. Roger subsequently went to Dublin, before joining BTG Pactual as managing partner in 2011. BTG Pactual subsequently had a few problems of its own (which were unrelated to Jenkins).
Like the three other men in London's criminal court, Jenkins steadfastly denies the fraud charges. His lawyer has said he intends to vigorously defend himself. The Guardian says he is 'fiercely clever, but abrasive with it,' and that his success at Barclays was down to his, 'political skills as [much as] his technical ability.' Jenkins' beautiful ex-wife, who reportedly helped woo the Qatari Royal family into investing in Barclays during the financial crisis, says he's just a 'very, very nice man.' Jenkins will now need all that charm to protest his innocence.
Separately, Citi's fixed income business may not have had a great fourth quarter but things could at least be improving. "Volatility has somewhat moderated and both equity prices and yields have shown signs of stabilization,” said CFO John Gerspach during yesterday's conference call, before adding the caveat that it's still early days. CEO Michael Corbat said Citi plans to focus on improving profitability in 2019, which doesn't seem to augur well for pay.
Russin bank VTB cut 100 jobs in London. "We have begun putting our European footprint onto a single platform and transferring our balance sheet from London and Vienna to Frankfurt. It means we can have risk in one place.” (Financial News)
Goldman Sachs, JPMorgan and Morgan Stanley have spent an average of £100m each preparing for Brexit. (Financial News)
Hedge fund manager Crispin Odey is betting that the pound will rebound on the basis that Brexit won’t actually happen after all. (Bloomberg)
Malaysia's finance minister is upset with Goldman Sachs. "You look at the agony that Malaysia had to endure — not just in terms of the figures but the trauma...You must have a heart. Sometimes you ask, does Goldman have a heart?” (New York Times)
HSBC has processed more than 3m FX transactions worth $250bn using blockchain technology in the past year. (Financial Times)
HSBC says that only 16 hedge funds out of 450 hedge funds were able to deliver positive returns before fees in 2018. (Financial Times)
Lincoln Payton, who spent 33 years at BNP Paribas, latterly as head of Americas corporate finance, is leaving the bank this quarter. (Business Insider)
Joachim Sonne, who spent 20 years at JPMorgan, latterly as co-head of the TMT banking team in EMEA, is stepping down. Burkhard Koep from Morgan Stanley is replacing him. (Financial News)
Greenpeace says Barclays is on the “wrong side of history” after publishing an “underwhelming” climate policy document that fails to rule out funding for tar sands projects. (Guardian)
Francesco U. Garzarelli, the former head of global markets macro research at Goldman Sachs, is said to be joining hedge fund Eisler Capital. (Zerohedge)
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