Morning Coffee: Ex-Goldman Sachs associate's weird trick on Goldman bankers. Credit Suisse HRs deemed incompetent
Samir Rao was once an associate at Goldman Sachs. After studying mathematics at Harvard University, he spent four years at Goldman in NYC in the shadow of the financial crisis from 2008 to 2012. Then Rao quit to become an entrepreneur, and became quite successful: he co-founded Ozy Media, a media company producing TV, podcasts and news for the 'change generation' with Malcolm Watson, another ex-Goldman banker. By 2019, Ozy claimed to have 50m unique users a month.
Ozy also had some big investors. Axel Springer and media-focused investment bank LionTree were among those who'd invested an estimated $80m by 2020, but the company wanted more money and so in winter 2020, it was on the verge of securing a further $40m from Goldman Sachs' (presumably the merchant banking division), at which point Rao appears to have been a bit wild.
The New York Times reports that Rao was having a hard time in winter 2020: he had mental health problems and was struggling, according to Watson. As the Goldman money loomed into view, Rao seems to have decided to try nudging the Goldman bankers into overcoming doubts about Ozy's real audience size by impersonating a YouTube executive on a conference call and informing the bankers that Ozy's YouTube videos were a great success and a big generator of advertising dollars.
It might've worked, were it not for the fact that Rao's voice on the call, "began to sound strange to the Goldman Sachs team, as though it might have been digitally altered," and that one of them subsequently emailed the secretary of the YouTube executive on an email different to the one provided by Rao on the call. The secretary didn't know who the Goldman bankers were.
Watson subsequently apologized. Rao - seemingly - got treatment and is still working for Ozy, while being the subject of a possible investigation by the FBI. Watson told the New York Times that Rao has now recovered and that writing about the incident was unethical given his illness. Presumably, Ozy didn't get the investment after all.
As bankers get back to travelling, the incident might be seen as an argument for meeting in person instead of on a conference call (Rao asked to shift to a call because he said video chat wasn't working). It might also be seen as an affirmation of Goldman bankers' astuteness that they recognized that the strange voice on the line wasn't someone with a sore throat or electronic larynx. It also suggests that ex-Goldman associates probably have the most insight into what makes current Goldman managing directors tick: if you want an investment from the firm, impersonating a satisfied client is the way to go.
Separately, after all the accusations and intimations of incompetence at Credit Suisse, a new group of staff at the Swiss bank have been deemed unfit for purpose: the people in HR.
Credit Suisse's London HR team has been fined the maximum amount of $27k for its egregious failure to follow procedure when making staff redundant in summer 2020. The judge said the fine was merited because the omissions were “so extensive and so obvious”, and because Credit Suisse's HR team was “substantial and well-resourced” and really should've known better.
The bank failed to inform staff in writing of the reasons for their dismissal and didn't divulge the numbers affected.
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