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Morning Coffee: The spared Deutsche Bank employees who have little reason to celebrate. Bernie Madoff would like a favor

At this point, Deutsche Bank employees are likely used to the seemingly ever-changing news cycle surrounding the embattled firm. But the latest turn in coverage was quick by anyone’s standards. Ironically, the new report puts a bit of a spotlight on a senior executive who has personally felt the ramifications of the bank’s multiple attempts to steady the ship.  

Ram Nayak holds the honor of being both the former and current head of fixed income trading at Deutsche Bank. He gave up the reins in May of last year after being promoted to co-president of corporate and investment banking but reclaimed the role earlier this month following the departure of his successor, John Pipilis. In one of his first moves back in his old seat, Nayak assured fixed income staff that their jobs were safe despite the bank announcing plans to cut 18,000 positions as part of its new restructuring effort, according to Bloomberg. Nayak reportedly told colleagues during a July 8 conference call that Deutsche Bank’s efforts to “resize” the business wouldn’t result in dismissals.

Less than three weeks later, Bloomberg is now reporting that some previously spared fixed income staff will indeed ultimately face the axe. The bank will eventually set its sights on an unknown number of traders and back-office employees who specialize in interest rate-related securities, though the timing remains unclear, according to the report.

Meanwhile, Deutsche Bank’s previously decided plans to shed the vast majority of its equities trading business took a bit of an odd turn on Wednesday when the firm said it had moved $613m in equities revenue back to the investment bank from the bad bank it had just set up. CFO James von Moltke said the bank’s management team reversed course to ensure it still had the ability to provide white-label services to corporate clients, if needed. “Why was it ever in the [bad bank]?” one confused analyst asked von Moltke before the bank’s thinking was fully explained.

Elsewhere, infamous Ponzi scheme orchestrator Bernie Madoff is back in the news. He has asked President Trump for clemency in an effort to shorten his 150-year prison sentence. Back in 2009, Trump told Vanity Fair that he was once approached by Madoff to invest in his fund, but he declined. “Many people gave 100% of their net worth to this maniac, and what do they have for it?” he said at the time. “This guy was a Svengali for rich people. He took their money like it was candy, chewed it up and spit it out.” Good luck, Bernie.


BlackRock announced that its head of human resources is no longer with the firm after he “failed to adhere to company policy.” There are no details as to why 10-year veteran Jeff Smith departed. The FT described the internal company memo as “strongly worded.” (FT)

UBS employs nearly 250 fewer U.S. wealth managers than it did a year ago, yet, the smaller unit booked record profits during the second quarter. (Barron’s)

Two big names are saying goodbye to Citadel. Faron Schonfeld, COO of the hedge fund giant's global equities arm, and veteran portfolio manager Brian Conn are both departing the firm, though Schonfeld will reportedly remain on in an interim basis until a successor is named. No word yet as to where they are headed next. (Business Insider)

Santander only has until Friday to file a response to the $110m lawsuit brought by former UBS investment banking chief Andrea Orcel, who was named the Spanish bank’s new CEO only to have the deal fall apart due to reported disagreements over bonus reimbursements. Santander has signaled it will contest the lawsuit. (Financial News)

Job switchers are getting the largest pay raises in years, and tech companies are leading the way. (Bloomberg)

Facebook has agreed to pay a record $5b fine to settle long-running allegations over misuse of private consumer data. Meanwhile, the Justice Department has opened an antitrust review to examine whether big technology companies are unlawfully stomping out the competition. Facebook, Google, Amazon and Apple appear to be the focus of the probe. (WSJ)

Have a confidential story, tip, or comment you’d like to share? Contact: Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by actual human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t).  

AUTHORBeecher Tuttle US Editor
  • AT
    A T
    30 July 2019

    What makes the other banks with huge derivative exposures better positioned? A temporary profitability spike for the US institutions, marginally better positioned European institutions and all are connected to each other and DB with huge exposures.

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