Morning Coffee: Banker sacked over $7 ‘mistake.’ Drama inside hedge fund that lured junior bankers

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A London banker who was fired for “stealing” a chain guard from a colleague’s bicycle has lost his lawsuit against his former employer, Mizuho Bank. Marius Caracota, who admitted he took the $6.60 bike accessory but only because he thought it was his own, said the episode was a “convenient way” for the bank to lawfully let him go after he had accused a manager of bullying and complained about a potential regulatory breach.

Caracota argued that no one on his “then-substantial salary” and “unblemished employment record” would ever take anything from a colleague that didn’t belong to them, noting that he knew the area was equipped with surveillance cameras, according to Bloomberg. “Add to that the value being less than five pounds and the allegation of theft simply lacked any plausible motive,” he said.

The former relationship manager at Mizuho believes he was branded internally as an “inconvenient nuisance employee” due to his formal complaints with human resources and compliance, and it was those episodes that were the real motive behind his sacking. Caracota noted earlier that he was forced to take temporary work in France following the 2016 incident after he couldn’t find a job in the U.K.

Simon Miller, the bank’s head of legal and compliance, said taking the bike piece “amounted to gross misconduct,” despite the low cost of the item. Bankers must have a “strong moral compass,” Miller said. The London tribunal voted unanimously in the bank’s favor, according to a Mizuho spokesperson.

Elsewhere, a new report provides a bit of a window into what it’s like to work for Balyasny Asset Management, the U.S. hedge fund with a history of hiring junior sell-side bankers while also poaching from rival buy-side firms on the senior-level. Business Insider dug up an internal email sent by founder Dmitry Balyasny last April with the subject line "Adapt or Die,” in which he told employees “we are getting our butts kicked” and that the firm’s long-short performance “sucks.” He suggested some investors wondered whether employees joined Balyasny “so they can enjoy not working too hard,” according to the email.

A source close to the hedge fund told Business Insider that the email was an attempt to “light a fire under the team.” Balyasny fired a stunning one-fifth of its employees during 2018, according to the report. Interestingly, the year-old email popped up because it was reportedly shown to employees of rival Chicago hedge fund Citadel during an all-hands annual meeting this February. Another source told BI that Citadel founder Ken Griffin used the Balyasny email to showcase what a “poor culture can do to a firm,” though others in attendance believed the purpose was to motivate Citadel employees to beat Balyasny.

Either way, the rivalry between the two firms seems to be on – if it wasn’t already. Citadel and Balyasny have each poached several traders and portfolio managers from one another over the years.


As part of its merger talks with rival German lender Commerzbank, Deutsche Bank executives reportedly said they are open to further restructuring the firm’s U.S. investment bank, including making additional cuts in equities, prime brokerage and corporate finance. However, top U.S. executives at Deutsche Bank followed the Reuters report by issuing an internal memo indicating the bank is “firmly committed” to the U.S. franchise, which has not been part of the discussions with Commerzbank. So it’s up to you who to believe. (Reuters)

Analysts believe a Deutsche Bank/Commerzbank merger would require the culling of roughly 2,500 investment banking jobs to save enough costs to make it worthwhile. As many as 30,000 jobs could go across both banks, mostly in retail and back-office positions. (Financial News)

Societe Generale is planning to cut as many as 700 jobs in Paris as well as hundreds of others in New York and London. (Bloomberg)

Wall Street firms are lining up to hire debt restructuring experts as they look to profit off an expected uptick in corporate defaults. (NY Post)

A former employee of Bitcoin exchange Kraken is suing the firm for allegedly failing to pay him more than $900k in compensation. (Bloomberg)

Proxy voting agency Institutional Shareholder Services (ISS) is urging investors to vote against the re-election of Santander pay committee chairman Bruce Carnegie-Brown over the botched recruitment of former UBS investment banking chief Andrea Orcel, who was set to become its CEO. A standoff over recompensating Orcel for his lost deferred pay from UBS led to the cancelling of his appointment. (The Times)

U.K. peer-to-peer lender Funding Circle is winding down its near-$400 million investment trust following a stretch of poor performance. (Financial News)

Goldman Sachs has appointed Catherine Cripps as a non-executive director of its international arm, returning the gender balance of the board after Susan Kilsby retired in January. (Bloomberg)

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