Morning Coffee: Ex-Goldman Sachs VP in new job gets told he’s nothing special. HSBC’s ex-Citi head of investment bank is telling some harsh truths

As the joke goes, the way that you can find out that a colleague used to work for Goldman Sachs is similar to how you find out someone doesn’t own a television – they will tell you. Harsh words have often been exchanged on trading floors between GS alumni and people who have a chip on their shoulder about the industry’s most successful bank.

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Former GS credit trader Matthew Austin, however, seems to have had an experience when moving to TD Bank which might make even the harshest Goldman critics feel a twinge of sympathy.  His complaint, in a lawsuit over a non-compete agreement, details an absolute catalogue of woes.

Austin was recruited to TD as a quantitative trader, who was meant to be working with the “voice” (non-electronic) trading team.  Although he was hired in early 2024, it seems that there were some regulatory hassles which meant that his quantitative strategy wasn’t launched until March 2025, by which time TD had decided to fire half of its sales and trading team, including the head trader on the desk that was meant to work with him.

The remaining half, apparently, “refused to execute the strategy, citing a lack of interest, time, and resources”.  It is possible that no references were made to Austin’s previous employer, but that might not be the way to bet; the new head of the voice desk apparently said that the team “were not bought in”.  By July, the new strategy had officially been shut down.

What do you do in a situation like this?  According to the complaint, Austin suggested that he could be given his own strategy team, but this didn’t seem to go down well.  He had already got a promotion out of the move – his profile suggests he had been a Vice-President at Goldman, but was a Director at TD.  Moving into a supervisory position would have been a further bump up, and apparently his manager “indicat[ed] that he was neither unique nor exceptional”.

Ouch.  Once you’ve been given that kind of feedback, there’s not much to do but resign, and that’s what Austin did.  Which, unfortunately for him, meant that he was subject to the twelve month non-compete clause in his contract – as well as the preceding saga, the litigation covers whether that clause is too broad and draconian to be enforceable under New York State law,

As always, a legal complaint only provides one side of the story, and TD Bank isn’t commenting. This is probably a story with no simple moral – unfortunately, sometimes you might find out that your face doesn’t fit in a new job, that a key person you were meant to work with has left, or that management has changed priorities since hiring you.  It’s bad luck to suffer all three, but by no means unknown in banking.

Elsewhere, Michael Roberts, the CEO of Corporate and Institutional Banking, has a bit of an ego blow for HSBC’s investment bank – it’s never going to be a “bulge bracket” player, and it never was. While this shouldn’t really come as a surprise to anyone who can read a league table, it’s unusual to hear a top banker (except, maybe Jane Fraser) so explicitly disavow any ambition to compete in the big time.  And it’s certainly a change from the days of John Studzinski and Matt Westerman, when HSBC’s huge capital base and strong franchise in Asia and the Middle East were meant to be the foundations for global expansion, not the be-all and end-all of the business.

But to everything there is a season.  Within living memory, Japanese banks like Mizuho had also foresworn international ambitions. UBS was once focused on wealth management and allocating capital away from trading.  Barclays was quite likely no more than one bad set of results away from being forced to leave investment banking entirely.  And now they’re all back in the game – not necessarily taking on the bulge bracket, but all visibly demonstrating ambition to compete.  Any optimists or big dreamers at HSBC might only have to wait ten years.

Meanwhile …

If you propose bonuses totalling £6.3m for yourself and your team of 12 bankers, then the day after they’re paid you all resign to work for the same new firm, which you later show up as co-owner and CEO of … your previous employer is going to be cross. Cross enough to sue for breach of contract and fiduciary duty and for the £6.3m back.  That’s what Barings is now doing to Adam Wheeler, CEO of private equity boutique Corinthia.  We haven’t heard his side of the story yet. (Daily Telegraph)

Hong Kong banking sometimes presents challenges you just don’t get in New York or London.  Some deal paperwork has to be physically signed in person, which means that when a typhoon is expected to strike close to the quarter-end, bankers are left running around the city trying to get everything executed before the clients have to work from home and hide from the storm. (Bloomberg)

Binance’s Changpeng Zhao is thinking of carrying out the rarely seen “reverse Platt” manouevre. Like the BlueCrest founder, he closed his investment vehicle (YZi Labs) to outside money a while ago.  But now he’s thinking of opening it back up again. (FT)

More than ten years later, Bernard Madoff’s fraud is still ruining lives.  New York lawyer Malcolm Sage was one of the few “net winners” who were lucky enough to take more out of the Ponzi than they put in.  Under the terms of the bankruptcy, he needs to give some of those profits back, even if it costs him his house. (NY Post)

Back in February, UBS warned that it was likely to see a bit more “attrition” among its US wirehouse brokers as it had cut some elements of their pay.  It looks like they got more than they bargained for, as payments to top producers are now going up. (Bloomberg)

If you’re looking for an alternative career, and if being a junior banker has got you used to a celibate lifestyle in exchange for promises of future reward, the Catholic Church needs priests. (WSJ)

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