True confession: I didn't originally set out to be a financial journalist.
Rather, the stories that always excited me most were crime stories. Not, say, serial killers or other weirdos like that. But crime-for-money tales have always been my favorite -- from the day I read "Catch Me If You Can" as a kid in the 1980s to my days as a night editor in the 1990s at the tabloid in Trenton, where the local underworld was run by the DeCavalcante family that served as inspiration for "The Sopranos."
But as the century turned, it became clear that the best crime stories no longer involved the mobsters of the world, but the Enrons and Tycos of the world. Those crime-for-money stories from the city desk were just a gateway drug to where the real hard stuff could be found: the business section.
I was pleasantly reminded of this when collecting the most interesting financial news stories of the week. First, there was this bizarre buddy flick that Phil Mickelson managed to find himself in. He has to surrender $1 million as a "relief defendant" in an insider-trading case after getting a hot tip on Dean Foods before the shares surged 40 percent. He did avoid criminal charges, so that forced the feds to deny he was receiving special treatment because he's a celebrity. Frankly, I'd make the argument that he obviously wasn't getting special celebrity treatment, because how can you accuse a guy of being a celebrity when he's currently below Brandt Snedeker in the World Golf Rankings?
Arguably, an even more intriguing story in crime-for-profit news this week was the tale of Gregg D. Caplitz, who was sentenced to three and a half years in prison for running a hedge fund called the Insight Onsight Strategic Fund. (Side note: This is a great name for a hedge fund. "Look, we have the insight, and it's right here onsight.") This fund's strategy was as risky and unconventional as it was simple: Caplitz siphoned money from retirement accounts of his brokerage clients and put it in a bank account. Then his associates in Las Vegas would use debit cards to spend the cash as they saw fit. The feds had a problem with this strategy, however, because clients lost almost all their money. That means that while the Insight Onsight Strategic Fund slightly underperformed the HFRX Global Hedge Fund Index, it quite possibly outperformed the Greece-focused fund run by Chelsea Clinton's husband.
The best part about crime-for-money stories is that the government provides all sorts of juicy details in their complaints. Also, lawyers really like to talk to the press. Heck, lawyers like to talk to anyone as long as they can count the talking as a billable hour.
And with the markets this week looking more tired than the Toronto Raptors after two games against LeBron James, let's be honest: Lawyers are the only ones making any real money these days.
For example, I'd love to know what kind of retainers the members of Bank of America's "bro's club" are paying after Megan Messina dropped a grenade in the middle of the club with her lawsuit accusing the bank of everything from egregious sex discrimination to front-running of client trades. I don't know what the first rule of "bro club" is, but I would make it: Don't stiff a new mom on her bonus and then make jokes about a "pregnancy discount" (according to the suit). Or ever better, how about a new first rule of bro club: No more bro clubs.
It wasn't just Bank of America's bro club that needed a shipment of fresh lawyers this week. Really, the whole bro club that is Wall Street itself needed to lawyer up, as Uncle Sam proclaimed essentially: Hey, we're not kidding about this whole bonus clawback thing. The SEC and other federal agencies are asking for public comment by July 22 on proposed rules that would mean top executives at big banks could have 60 percent of their bonuses deferred for four years or even have bonus money taken back as long as seven years later if they're found to have engaged in any monkey business.
We are excited for the creative writing this exercise will inspire among Wall Street lawyers. So this Trade of the Week is for you Real Men of Genius: Mr. Wall Street Comment Letter Writer Guy. Tell us how happy you are to have the opportunity to comment about this bonus-rule proposal. Then tell us how it's the worst idea since Crystal Pepsi. Tell us in detail how deferring bonuses will take food out of the mouths of innocent children, wives and mistresses. After all, won't it just encourage more petty crime if we force executives to toil away below the eight-figure pay level that marks the poverty line on Wall Street?
Swing for the fences, Mr. Wall Street Comment Letter Writer Guy, because we know that's the only way you know how to swing.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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