The Bankers Trust Tapes

It's Nov. 2, 1993, and two employees of Bankers Trust Co. are discussing a leveraged derivative deal the bank had recently sold to Procter & Gamble Co. "They would never know. They would never be able to know how much money was taken out of that," says one employee, referring to the huge profits the bank stood to make on the transaction. "Never, no way, no way," replies her colleague. "That's the beauty of Bankers Trust."

That dialogue was automatically picked up by a Bankers Trust recording system--similar to those at other financial institutions--that routinely tapes conversations involving transactions, mainly to settle disputes over trades. It is part of a mountain of evidence--6,500 tapes, as well as 300,000 pages of written material--that forms the basis of a major legal assault by P&G against the bank. P&G contends that the 1993 conversation is just one of many showing that Bankers Trust deliberately misled and deceived P&G, keeping the company in the dark about key aspects of the derivatives the bank was selling.