Morning Coffee: Morgan Stanley MD accused of inappropriate remarks retains banks' nemesis. Hedge fund keeps paying for loss-making PMs

Kow Attah-Mensah came a long way to get his job as global head of commodities at Morgan Stanley. He's not going to go without a fight.

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Bloomberg reports that Mensah suffered an "abrupt" termination last month. His sudden departure was reportedly triggered by an internal investigation into comments he made to colleagues. Morgan Stanley is declining to comment, but Bloomberg claims to have spoken to people at Morgan Stanley who said his behaviour was unacceptable for someone of his stature. 

Attah-Mensah has turned to notoriously pugilistic (and successful) attorney John D. Singer to protest his innocence in the strongest possible terms. Speaking to Bloomberg, Singer says Attah Mensah was subject to a "bogus" internal investigation, that his interactions with colleagues were "benign," that there were "no allegations made of sexual harassment." Attah Mensah is a man of "the utmost veracity, loyalty and honor,” declares Singer. He now intends to "aggressively" prosecute Morgan Stanley for wrongful termination.

Morgan Stanley's lack of response might be a judicious silence, or it might be because it's calculating how much it will need to compensate Attah-Mensah if Singer's defence is successful. Singer's track record of defending men accused of sexual discrimination is impressive. He represented Harold Ford Jr, who was fired from Morgan Stanley in 2018 for alleged misconduct, before Morgan Stanley clarified that this wasn't the case. Singer also represented Omeed Malik, the former head of prime broking at Bank of America who was fired following accusations that he'd harassed junior female colleagues. With Singer's assistance, Malik proved those accusations false and went on to receive a $10m settlement from BofA.

Thanks to Singer's intervention, Attah Mensah's unexpected exit may therefore turn out to be unexpectedly lucrative. Attah Mensah, who is from Ghana, spent nearly 19 years at Morgan Stanley before being unceremoniously cut in a year when commodities trading isn't going well at various banks. Speaking to the MIT magazine in 2019, he said that he had no idea about banking when he arrived at college. - "I thought that the career that I have today was for people who weren’t like me. I didn’t know that I could go to a Wall Street bank and start from the very bottom, with no connections and no prior knowledge of what I was doing, and make my way to a reasonably high position in the bank." 

Careers are "supposed to last "20, 30, 40 years," Attah Mensah added to MIT. If he now gets $10m in compensation for wrongful dismissal from Morgan Stanley, he may be able to rethink this approach and opt for something entirely different instead. 

Separately, hedge fund Balyasny is making a habit of hiring portfolio managers who have made a loss elsewhere. Fresh from hiring Dave Brodsky from Citadel despite his $60m drawdown, Balyasny has hired Ron Choy from BlueCrest, despite his alleged 3% loss there this year before his resignation.

Balyasny is thought to be spending $50m on Brodsky and $30m on Choy. It's a reminder that the population of portfolio managers with a track record of making big money is small, and that a brief down period can be overlooked when you're a multistrategy fund with billions to deploy and not enough people to do it.

Meanwhile...

One top hedge fund manager estimates that Treasury basis trades generate roughly $8bn in aggregate revenues a year. “I don’t particularly like the basis trade, but we do it because it exists,” he says. “It’s basically providing a service.” (Financial Times) 

Point72 closed a pod focused on emerging markets. Mihaela Yankova, the New York-based portfolio manager who ran the pod, and London-based analyst Luca Maia are leaving. (Bloomberg) 

Steve Cohen's Point72 is paying $400k plus a bonus for an AI engineer. (Financial News) 

Private equity firm Carlyle is refocusing its attention on its Washington HQ. “Geopolitics are playing a much more critical role than they have in 30, 40, 50 years. Washington had become a bit under-prioritized as a power center.” (Bloomberg) 

Did Trump pause the tariffs because of the auction of three-year US government debt which was boycotted by foreign investors? (Financial Times) 

Revolut has got a new compensation structure. Junior employees are getting more cash in bonuses. Senior employees are getting more stock. (Financial Times) 

John Paulson has made a lot of money betting on gold, having bought it when it traded at $900 a troy ounce. It's now close to $2.5k. (WSJ) 

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