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The Reverse "For Cause" Clause
A former Pequot Capital Management Inc. employee told his psychologist he was fired after he stopped supplying the hedge fund with insider information, according to a letter that two U.S. Senators sent to the Securities and Exchange Commission.
David Zilkha made the remarks about his termination from Pequot to his psychologist, according to a Nov. 18 letter that U.S. Senators Charles Grassley and Arlen Specter sent to SEC Chairman Mary Schapiro. Grassley and Specter said they learned of the admission from a legal transcript that is part of Zilkha’s divorce proceedings.1
The only thing the surprises us is how absolutely brain-dead Pequot would have to be to fire someone on this basis- if that is indeed what came to pass. What exactly did they think was going to happen after that?
- 1. "Pequot’s Zilkha Fired After Tips Ended, Senators Say", Bloomberg, November 19, 2009.
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The only thing the surprises us is how absolutely brain-dead Pequot would have to be to fire someone on this basis- if that is indeed what came to pass. What exactly did they think was going to happen after that?
Pequot(baller)+hubris=brain dead
http://ancienthistory.about.com/od/heroicbehavior/g/Hubris.htm
Lesson 3
An eagle was sitting on a tree resting, doing nothing.
A small rabbit saw the eagle and asked him, 'Can I also sit like you and do nothing?'
The eagle answered: 'Sure, why not.'
So, the rabbit sat on the ground below the eagle and rested. All of a sudden, a fox appeared, jumped on the rabbit and ate it.
Moral of the story:
To be sitting and doing nothing, you must be sitting very, very high up.
Isn't that why Gekko was going to fire (my boy) Bud Fox?
Lesson 4
A turkey was chatting with a bull.
'I would love to be able to get to the top of that tree' sighed the turkey, 'but I haven't got the energy.'
'Well, why don't you nibble on some of my droppings?' replied the bull. They're packed with nutrients.'
The turkey pecked at a lump of dung, and found it actually gave him enough strength to reach the lowest branch of the tree.
The next day, after eating some more dung, he reached the second branch.
Finally after a fourth night, the turkey was proudly perched at the top of the tree
He was promptly spotted by a farmer, who shot him out of the tree.
Moral of the story:
Bull Shit might get you to the top, but it won't keep you there..
+100 (nominal +10 adjusted for reflation)
I'm pretty sure the actual paperwork documenting the firing doesn't say a thing about insider information as the reason for his firing unless, as you say, someone was or is brain dead.
And if by some chance it does, it's now being diligently scrubbed of all traces, along with an elaborately weaved story (with supporting and cross referenced documentation) of how his supervisors had been verbally warning him of poor performance for over a year but the last straw was when the employee was caught downloading porn or surfing web sites (Zero Hedge perhaps?) during working hours.
Unfortunately I've seen this happen a few times in corporate America. I witnessed a particularly egregious example about 12 years ago by accident. Luckily I wasn't seen or my butt would have followed the other poor sap out the door. The manager who washed the floor and scrubbed the dishes was soon promoted.
I hear a lot of truth here, having seen it personally many times in a rather short number of years. The appearances kept fool all the new people until it's too late for them to get out easily. Any idealistic college students should pay heed!
This guy could be going down with the firm if this is true and if it is, perhaps Pequot felt their secret was safe when firing him since he would have to implicate himself in order to blow the whistle on them. Of course it doesn't seem like he intentionally let the cat out of the bag here. They obviously didn't anticipate a "leak".
Okay let's say I am a douche at Pequot.
While I am there we are all pulling insider info to trade on and pulling in big bonuses for doing it.
Then I get fired. F#@ed the wrong secretary, stole the petty cash, came to work drunk or coked out like Kudlow too many times, who knows... any way I get canned.
Then I read investigations are sniffing around Pequot for insider trading. Since I am one of the guys outside looking in now... wouldn't it be easy for Pequot to make me the patsy.
Pequot to Feds, "It was that dickweed we fired. He was insider trading of all things!"
So I need to get it on the record some where and early that Pequot ordered me to inside trade.
So I invent the story Pequot fired me for NOT insider trading enough, tell my shrink...
Whoops my registered therapist, psychologist...he is a certified SNFMPLA, you know... and make sure it gets into my wife's divorce complaint...
Ass covered, thank you very much. Pequot, your move...
Come on you guys it's Corporate Etiquette 305A, I mean Backstabbing 101. Didn't you have to take that one?
Now you, dear sir, have a particularly devious mind. Or as one scum bag said to another scum bag "I like the way you think." :>))
The better question should be:why is any of those geniuses would be able to outperform the market without some sort of information that is not available to the public?and if they are truely geniuses,why would they need a bailout by the fed to the tune of trillions of dollar?had they been geniuses,most of them would have been on the sideline back when the housing market started collapsing(or better yet short the market),and this way they would have spared themselves and the taxpayers all the trillions that the fed had to inject to save their asses. No inside information=regular index performance(or a black jack odds to outperform the market).........
did his wife think that was grounds for divorce?
No---the "grounds for divorce" were his refusal to give her the inside info also!
If you have time, google up the connection between Pequot, Gary Aquirre (formerly of the SEC), and John Mack. Interesting connect-the-dots story.
If true, this is a real stupid move on Pequot's part. The only thing dumber is firing a senior investment analyst suffering from Multiple Sclerosis from a large Canadian public pension fund right after he warned you of the pending doom and then try to intimidate him through corporate lawyers and various despicable tactics. That truly was a dumb move!
You no longer qualify as a psycho-banker, you're fired!