Morning Coffee: Citi comes for 45 year-old trading MDs in job cuts. Karmic bypass for Fintech boss accused of running a "frat house"
When Citi flagged the sorts of people it would be cutting in its Bora Bora job cuts in October, it seemed that it would be cutting executive roles two to three levels below the CEO and people engaged in pointless meetings and administration. The implication was that the people being cut wouldn't have revenue lines attached to them.
The fact that Citi is out there, eliminating senior traders, might therefore be something of a shock. Bloomberg reports that yesterday's cuts of 300 managing directors included Marc Pagano, head of emerging markets credit trading. Adrian Lui, head of spread products trading for Asia Pacific and Dirk Keijer, head of equities trading for Europe.
All are traders of a certain vintage. Pagano began his finance career in 1998 according to his FINRA registration. Keijer began in 1996, as did Lui. This puts them all in their mid-40s.
It's not clear whether other trading heads have gone too, but the exit of the three men is a warning to senior traders without their own pnl. Once you're a cost, you're dispensable, especially in a market where revenues are down 14% year-on-year, as they are in Citi's equities business.
Keijer's disappearance looks like an admission that the money Citi invested in growing its European equities sales and trading operation in the past decade may not have come to fruition. He joined from Goldman in 2016 and was originally in equity derivative sales before being promoted to run all equities sales at the bank in 2020.
Pagano, by comparison, seems to have been an institution at Citi. He was head of emerging market credit back in 2008, when he was accused of encouraging colleagues to pretend to be naive investors to get good prices in derivatives trades, a practice that doesn't seem to have done his career any harm.
MDs let go at this time of the year will receive severance pay, but no bonus.
Separately, anyone who accused Mike Cagney of running a "frat house" at California technology company SoFi and who hoped that he would disappear in a cloud of ignominy after resigning without any admission that those accusations were true, will be disappointed to learn that Cagney is back and seems to be one of the only people making money out of fintech these days.
Bloomberg reports that Figure Technologies Inc, a blockchain provider founded by Cagney after he sloped away from SoFi, is considering an IPO for its lending arm in the first half of 2024 at a valuation of $2bn to $3bn. Cagney, who founded the company in 2018, will be presumably become very rich. It's a reminder that while crypto is dead, blockchain isn't and that the market is agnostic to whiffs of unproven scandal at former employers. Figure is currently looking for a director of capital markets in New York, so there might still be a chance to get a job there, and stock, before the IPO.
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Meanwhile....
Ardith Lindsey, a former Citi electronic equities managing director, says she was subject to sexual assault and harassment by superiors and that she was coerced into having a relationship with a boss, Mani Singh. (Bloomberg)
Nacho Gutiérrez-Orrantia is becoming head of Citi's European banking cluster. He's optimistic about next year: "There is pent-up demand and pent-up offer in terms of deal flow. If you check the amount of dry powder in the hands of sponsors and the potential portfolio companies that could be put for sale, the level of discussed public to private deals and corporate activity - it is large." (Reuters)
Nomura currently employs 25 people in Paris and could add about 10 more across local sales and structuring teams next year. (Bloomberg)
Top US banks in London appear to have increased headcount by 34% over the past five years. European banks have cut headcount 1%. (Financial News)
Louie Chavez, a 24-year-old analyst at Goldman, loves working in the office. It's all about getting responses to questions "in real-time," plus "being around your colleagues and being able to joke with them." (Business Insider)
Julius Baer has added a net 75 private bankers this year “with a promising pipeline supporting further hiring.” (Bloomberg)
Revolut will offer its European clients the chance to trade in government and corporate bonds by early next year in an effort to make the multitrillion-dollar industry more accessible for retail traders. (Financial News)
Evercore hired Stephen Withnell, an MD who left Goldman Sachs in 2019. (Financial News)
The US Justice Department wants more than $4bn from Binance, whose founder Changpeng Zhao might face criminal charges for money laundering. (Bloomberg)
In one famous 2012 experiment, lab rats consistently let a trapped companion out of a cage to share some chocolate chips. (Bloomberg)
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