The Fall of a Star Trader
bloomberg.com
bloomberg.com
The documentary shows how there were some really high level bank executives involved in libor frauds and that was getting media attention. Therefore, SFO met with banks and eventually, based on documents provided by the banks, decided to prosecute simple traders.
The reason traders have been sent to trial has nothing to do with the actual libor fraud carried out by executives. But since it is still about libor, has been sold to the media as the libor trial. Start and end date of the "crime" have been carefully chosen to not include evidence of the executive crimes (such as the phone call shown in the documentary). SFO experts have admitted during trial to lie in order to convict these traders.
Many of these traders were in their early 20s when the alleged crime happened. Germany, France, and EU have already said that it was not a crime at the time and rejected extradition.
I rarely felt as sad as after watching that documentary.
Of course the investing public with LIBOR based loans wants blood, and they just believe the headlines that a few traders "conspired" to fix rates. In reality the entire system was built on a profoundly flawed incentive structure of trusting banks with positions that profit from LIBOR moves to not alter LIBOR submissions to make themselves money. But LIBOR is too big to fail at this point so they chose to scapegoat a few traders instead of admitting the whole system is corrupt.
And in a story like this that covers years of time it's not that unusual to describe the person as how they're perceived at the time in points of the story. It gives you a sense of the journey and how far they've fallen. "Crook in jail" doesn't carry quite the same gravitas as "wealthy banker on top of the world, definitely one of the 1%, now fucking fucked".
If anything it's clickbait only because it suggests the inevitable consequences will be serious. But who's betting for pretty weak prison sentence and he'll still be a multi-millionaire at the end of it all?
https://quoteinvestigator.com/2013/09/09/fortune-crime/
J.K. Galbraith: the notion of the "bezzle", from The Great Crash: 1929:
https://www.goodreads.com/author/quotes/23458.John_Kenneth_G...
It's a great sounding quote, but obviously entirely untrue.
That doesn't make it a crime. But it does make those people less credible.
Berkshire Hathaway was investigated for insider trading, resulting in Sokol’s resignation. Four former execs of BK’s General Re were found guilty of fraud.
Almost all of those were done (temporarily) well after the fortunes were made.
Any examples you'd find I'd bet 95-99% were either the result of subsequent monopoly or as a result of government intervention either directly/indirectly benefiting them.
The 1-5% which weren't were likely punished. As the examples you mentioned were...
And Buffett was the richest man in the world well before either of these incidents.
Care to share a few of them which generated their wealth?
You seem to be getting pretty worked up about this. The reason I don’t think the claim is obviously untrue is because I believe the magnitude of wealth involved, and often the scale of operations/actors, increase the probability of actions ranging from morally dubious but legal to outright criminal.
Per one of your other replies, we can quibble about the quote and what “behind every great fortune” means, exactly. You seem to be interpreting it to say that criminal action was a major factor responsible for the fortune, while I interpret it more loosely, the impact being irrelevant.
At any rate, I doubt the quote is meant to be taken strictly literally, and is more of an aphorism.
"The secret of a great success for which you are at a loss to account is a crime that has never been found out, because it was properly executed."
The concept is metaphorical, but it is not without any merits. And there may be other elements, either on their own or in addition to, that crime, which accounts for the wealth. Blind luck (or some measure of luck-and-skill) being among the less-accounted-for in many instances.
As to the list you present, I see among the several monopolists, operators in corrupt countries, gambling and gaming, coal and fossil fuels industries, advertising, and financial services, numerous fairly obvious crimes, in at least a moral sense, though yes, also, quite often literally criminal.
Everybody lighten up, it's an aphorism.
He was monitoring basis points to attempt to capitalize on it. But the SEC accused him of manipulating the markets?
I don't think he hacked any systems doing this. I don't think he created a fraudulent pyramid scheme here.
Did he violate some kind of public trust?
At the same time, there is a lot of money riding on what the EURIBOR is at any time. The allegation is that this guy (and others) conspired to change their submissions to change the listed EURIBOR and make a lot of money.
I'm no expert though, and I could be wrong in my understanding.
Can someone provide some insight on the best way to get into the industry as a Trader?
Can you still enter that industry when you are in mid-career?
I would think that since trading requires a lot of patience, and analytical skills, that something like this is better suited to more mature people. This is probably not something that you would entrust to a young early 20s person.
This guy's background says he joined as a quantitative analyst after college. And then rose to the role of a trader.
Asset managers still make big, directional bets though. Exactly how decisions are made varies from place to place, but decision makers will typically be older and have plenty of experience. Asset managers get lots of due diligence questions so no-ones handing millions out to a junior in their early twenties.
With regard to entering the industry, it's pretty hierarchical, and can be siloed: techies do tech, traders do trading, and there's not much crossover.
The most reliable way of entering the industry is to get on a graduate program and work your way up. Failing that, a quantitative PhD might get a hedge fund or HFT interested.
Do be aware that while it's a ticket to a comfortable upper middle class life, the salaries are not what they once were. Seven-figure bonuses are pretty much a thing of the past for most front office staff.
Not really true. It's true that there are software roles that don't interact with strategy much, and often traders/quants that don't do much proper software. But in many places the line can be very blurry.
> The most reliable way of entering the industry is to get on a graduate program and work your way up. Failing that, a quantitative PhD might get a hedge fund or HFT interested.
HFTs and hedge funds all hire of plenty of new grads and experienced-but-not-PhDs doing quant/trading style work - Hudson River, Jane Street, Two Sigma, Tower, I think Citadel all will.
I guess aiming big is the way to go in the finance world.