Among people who want to see ‘bankers’ paying painful penance for their role in the financial crisis, it’s a popular refrain to complain that the perpetrators haven’t been jailed. In the case of ex-RBS CEO Fred Goodwin with his vintage cars and £340k a year pension, this is true. But there is also someone paying dearly – and only now realizing the price.
David Drumm was CEO at Anglo Irish Bank from 2005 to 2008. After borrowing €100k in bail money from his wife’s parents, he was convicted last Friday of fraud at the Dublin criminal court. Drumm now faces what the Irish Independent describes as a, “potentially unlimited amount of jail time,” for his part in a €7.2bn fraud that resulted in the nationalization of Anglo Irish Bank in a deal that cost Irish citizens £22.4bn (€29bn).
A well known figure in Ireland, Drumm has been largely ignored by everyone else. He looks doleful in all the photos and his hands reportedly trembled when he learned the verdict last week. An accountant by training, he helped hike Anglo’s profits 70% during his first two years as CEO. Then came the financial crisis, hundreds of millions in directors’ loans and a ruse by which Anglo sent €1.2bn of its own money in a circle through Irish Life, so that €7.2bn appeared to be “customer” cash at its year end.
Drumm isn’t the only AIB banker who’s been punished: three others were jailed in 2016, but their terms of between two and three and a half years seem short compared to the 10 years or so that Drumm can likely expect.
Drumm, who has been living in Boston, Massachusetts, with his wife and two daughters, tried to declare himself bankrupt in 2010 after declaring debts of $14.3m and assets of $13.9m, but his attempt was refused. At the trial, he had no supporters on the public benches and no one but his lawyers came to speak to him after he had been sentenced. None of his family were in court for the sentencing: his wife went back to Boston for his daughter’s graduation. While life goes on for everyone else, Drumm is going down alone. His haunted expression should be a palliative for everyone who wants to see pain in the crisis perpetrators, and a warning to bankers anywhere who might feel tempted to nefarious actions.
Separately, Jamie Forese, the president of Citi’s institutional clients group (its investment bank) has a warning for anyone working in technology and operations. Forese told the Financial Times that Citi will likely half its 20,000 technology and operations staff in the next five years as machines take over. At the same time, Forese said Citi would likely hire in other areas such as sales and research: “What people are doing, the type of work being done by the human rather than the machine will change.”
Meanwhile:
Barclays is reversing its strategy of pulling out of Europe and is trying to Brexit-proof its strategy by hiring on the Continent again. (Financial News)
Perella Weinberg hired Cyrille Perard, the co-head of Goldman Sachs in France, Luxembourg and Belgium. (Les Echos)
HSBC wants to increase the return on equity at its U.S. unit from 0.9% last year to 6% by 2020. (Financial Times)
HSBC plans to invest up to $17 billion in China and new technologies. (WSJ)
Bank of America hired Larry Slaughter, the former head of M&A at J.P. Morgan as executive vice chairman as it seeks to improve its standing in European league tables. Slaughter is the third senior banker BAML hired in Europe in the past few weeks. (Financial News)
Lauren Bonner is still working for Point72 whilst suing the fund for sexism. It’s, “awkward but also not that bad.” (CNBC)
Ponzi hedge fund manager squandered millions on a Ferrari, horse racing and gambling in Las Vegas. (Daily Mail)
The hottest jobs at Microsoft involve developing an AI chip in the Azure public cloud division. (CNBC)
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