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Jefferies Said To Demand Bonus Clawbacks From Terminated Bankers
Earlier today, Fox Business' Charlie Gasparino broke the news (which was really surprising only for anyone who had not seen the JEF stock slide in the past several months) that the firm has fired a substantial number of people just after the bank's fiscal year end: "People inside the firm say the cuts are occurring most heavily in Jefferies' equities division, and according to traders inside the firm, they could total as much as 11% of the entire firm when the job cutting is complete". We now have some additional, and more disturbing information: the actual number of people is roughly 65 or so, but the worst news is that Rich Handler will demand a 1 year clawback from the departees, in the form of bonus refunds for both cash and stuck. While this has been isolated to Jefferies for the time being (which has other liquidity concerns of its own, most of which are quite well known), we are certain that now that this practice has a "case study" other banks, especially of the B-grade variety, will implement comparable clawback strategies. This approach, once adopted broadly, will likely cause a substantial dent in banker spending patterns, as rarely if ever before have termination without cause been accompanied by demand for money back. In effect, this activity will force even greater spending retrenchment, and could cause a flight of the ultra high net worth retail customer who will suddenly be forced to think twice about spending not the upcoming bonus, but even the previous one, heretofore considered safe and sound, in some Cayman bank account.
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Time to short BID.
Baaaaaaaawwwwww! The poor butthurt parasites! How will they survive? They can't clawback their bonus money from the hookers or their coke dealers. Baaaawwww!!!
So is this where thieves part company?
Is this where the boardroom and the real equity starts to pin the blame on the executives who thought they were in the club?
One could only hope. It is bound to happen of course.
Cant they merely 'ask' for it back? There is no actual recourse to make them give it back, is there?
I do not see how this is remotely legal at individual level. There may be clawback opportunities with just stock, stock rights and possibly even pensions. But for cash, how?
The UK tried similar things since 2008 with its banking executives and the farce of their failed banks (notably RBS). The law was so watertight that the only reason they got even a fraction of funds from an executive was because he volunteered it, basically he made a nominal donation via his pension!
Those "departees" at Jeffries should have great legal recourse now and in future. The savy ones (good institutional traders tend to be) would make it clear they will gladly use the legal opportunity to management, thus likely causing management to back down.
I guess they can have their money back when they give the employees' their time and effort back.
yeah right - like they really want to fuck themselves
The all mighty and high will also be stripped of wealth for the sake of the mysterious controllers of the Earth.
dupe post, sorry
Bank accounts in the Caymans are no longer safe, from the IRS anyway.
But, the banksters probably already have quiet little deals worked out with .gov so that THEIR ACCOUNTS are safe. But, budding tax evaders ought not even CONSIDER doing stuff like that: stashing money overseas illegally. And even that is getting harder as many foreign banks ´over there´ do not want Americans´money anyway.
Buy gold instead. And if you can get gold to a trusted place overseas, look into that!
Freudian slip there Tyler, "Cash and Stuck"..
love it.
Congress just made Panama the New-Safe-Haven.
It's not illegal to keep money overseas as long as you report it and pay the interest. Gold is safer though
Best fucking news I've heard all day. I want those fucking weasels to suffer.
I'm pretty close to pulling the trigger on it. The stock has gone to under $10 every major slowdown since the 90s, I don't see how it has much upside potential given the stuff happening around the world besides getting raised on some massive new QE program or something.
Euro 6E... not looking so hot today - http://hedge.ly/uQPyKP
They shouldn't of gotten a cent to begin with!
http://silverliberationarmy.blogspot.com/
Dear Lord Blankfein:
How will you justify record bonuses when GS stock is down more than 40 % on the year?
Regards,
F.B.O. Non-employee shareholders
Dear HH:
Tradition.
Regards
LB
Dear HH,
We're doing God's work here!
Regards,
LB
let the lawsuits commence. Maybe go long law degrees?
don't bother. tuition inflated, return on dollar sucks. besides, there is already a flood of young law school grads who either cant find jobs or end up in shitty underpaid work.
this is 100% true.
Unless you are an extremely bright young lawyer-to-be, just save the expense and time of law school and just go be a paralegal. Since they are paid less, they don´t have any problem getting a job.
Most lawyers I know have pretty boring jobs, so being a paralegal does not cut into (much) a more interesting job.
The only exception I would understand right off is being a lawyer-lobbyist in DC. At least until #guillotinethelawyers comes by...
there is always room in the legislature. sweet pensions and opportunities for graft.
Well John there may be hope yet...if the Euro Zone does part ways it will be a legal bonanza!
Just what the world needs...more lawyers. I hear their car on the red-line will have green lamps.
Not really... pretty specialized and will fall to a short list of well-established firms... new entrants into the market will be scrounging around the uncontested docket (divorces) and the bankruptcy courts like they have for a few years... it's a race to see who can place the cheapest add in the local paper and make the most obnoxious billboard... all at the expense of any viable, top-shelf future.
Dick Handler... you have some 'splaining to do...
Damn! JEF is cash strapped...
Dick Handler will always have a job. . .
(does he work with Dirk Diggler by any chance?)
No, he works with Dick Trickle.
Eat your peas!
My response would be a big fuck you to someone if they asked for my bonus back. Im also not sure as to what (if any?) legal issues are at stake here. That thief Cassano didnt give a cent of his subprime bonus back, and here JEF in an (arguably slightly better) similar situation, I dont believe any of the fired or still employed have any obligations to submit to the request..
read your contract. I'm sure it says they can kill you if they want; or something to that effect.
Contracts can "say" anything, whether they stand up in a court of law is another story.
no doubt, but who'd want to spend their entire bonus (and them some) on legal fees fighting the man? good luck.
"whether they stand up in a court of law is another story."
In case you haven't been paying attention.., the courts are about as fair and equitable as the TBTFs themselves. The justice system has suffered a breakdown. Just ask Eric...
There's nobody more corrupt than the judges. Every single one of them used to be a lawyer.
Most times, the law says if you signed on the dotted line, you're screwed. What, you did not read it before you signed it? Is that your signature right there? Tough cookies. NEXT!
always try to slip in a per: before your strawman signs for you.
total lol
Clawback can't be legal.
It can certainly be equitable, which is good enough in most circumstances (and certainly can give the court jurisdiction). It may be legal depending on what contracts any of these folks signed or agreements they entered regarding following corporate policy (and then corporate policy had to allow it).
Regardless, even if only prospectively applied, it would be the death bell of the industry... not much point in eating your cake if you can't have it too... for people who love just having things.
That did not stop MF'n Global from reversing a bank wire transfer.
Yep. Direct deposit works both ways, just like the bankers and their hookers; digits in, digits out. Be sure to wash your hands!
Nothing a Wall Street Bank does is illegal. Haven't you learned that yet? ;-).
Legal? Depends on which gun is used.
In other news: Dick Handler has a clawback function. Who knew?
While I think you're probably correct, I'd love to see Cassano, Chuck Prince, Angelo Mozillo, et al., get clawed back.
Well..........clawed anyway, and prefferably in the eyes.
All that is static, this is one last attempt before they go the way of the Global motherfuckers... Or they'll start 'commingling' if they haven't already.
+1000 ZP - wish you ran the SEC with an attitude like that! Hell knows no fury like that of Canadian with integrity!
My response would be a big fuck you to someone if they asked for my bonus back
Roger that one. I worked, you paid, fuck you and fuck the law at this point. (PM's pretty much "anything"-proof short of armed robbery)
looks like each passing day is proving jim rogers correct when he advised young folk to forego wall street and learn farming.............
The jig is up, there is no more honor amongst thieves
I wonder how many of today's yoofs could farm.
How will they fire someone and then demand that the fired employee pay them? What is the consequence if the employee can't pay? Will the employee have to remain an employee of JEF? I don't see how this is supposed to work.
Dependent on the compensation break down and/or severance pakages it can be taken from someone's paycheck, severance, etc. Do not pass go and pay the bank 200 bucks. Thankyabuhbye.
So JEF is forcing employees to fund their severance payments with their previously paid bonuses. Genius.
the bonus is paid by the bank/broker by taking out a forgivable loan. they charge the employee interest and per IRS rules deduct that pricipal from future earnings in a multi year vesting schedule. The loan can be demanded back. no such thing as free lunch.
I guess that makes sense if its paid that way. It certainly wasn't set up that way a few years ago in investment banking, at least at the lower levels
'What is the consequence if the employee can't pay?'
Look up 'kneecapping' in the urban dictionary. Capische?
You paya da moolah, or we breaka yo face.
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With leverage dropping to modest levels following the halcyon pre-2008 era, prime brokers are finding new ways to service their hedge fund clients, focusing on areas such as securities lending in the Asian markets and broadening their range of synthetic solutions. This Hedgeweek Special Report outlines the latest developments in Prime Brokerage, based on interviews with:
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http://www.econbrowser.com/archives/2011/12/more_on_those_s.html
But Professor Wray goes on to speak admirably about an analysis by his student James Felkerson that does exactly that, and concludes that the Fed lent not $7.77 trillion but instead $29 trillion.
A separate issue concerns whether it is appropriate to add together outstanding loan balances as of different points in time in order to generate a total, for example, adding MBS to items 1-5. Here Professor Wray reasons by analogy:
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MF Global and Rehypothecation
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I am glad to see you are out of your depressed phase.
You are a lot more fun manic.
I am to Please!!
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This just keeps getting better and better.
YOUR FIRED!
Oh, and pay me back last year's bonus too!
Didn't know all these were conditional?
You know the world is fucked when they won't merely fire you, but try and steal money back.
What next, bullets to the head and a bill for the bullet and cleanup?
pods
"Clawback For My Buds": Dick Handler.
(that's just not right.)
It's completely stolpered man. Totally stolpered.
Dick Handler has claws. Hmm...or is that clause...
His mother's maiden name was Vagina Dentata.
what they need to do is fly to vegas bet it all on a football game, have a friend take the other side, get a receipt when you lose and tell Jefferies they gambled it all away
+1000 Seasmoke - First file an injunction against JEF for the Clawback then the EX JEF Bankers can start a Hedge Fund - Short the SH*T out of JEF and buy CDS - then when JEF collapses get paid again! Quid Pro Quo Handler!
Couldn't have happened to a nicer crew.
C'mon guys give the bonus money back, please ?
+1,000 Josh - I wonder if any of the Ex-JEF bankers will be afforded the luxury of a 'Corzine' - When asked to return their bonus they can simply reply, "Sorry Mr. Handler, I simply have no idea where the money went.' OR (my personal favorite) "Visa, Mastercard, My Drug Dealer, invoked SUPER PRIORITY on those funds'
My sarcasm sequencer is shorted out: is this a serious expression of concern about "clawing back" blood from turnipheads, or is Tyler just getting a foot in on these sorrybastards?
A bank telling former employees to pay their bonus back to the bank - huh ?
+1,000 - Paperbear It is the ULTIMATE BANK BAILOUT! Displaced Bankers bailout their former Boss Bankers...Socializing the Losses (My condolences to any Ex-JEF banker as this is absolutely a all time NEW Thug low!)-
Jefferies employees have just been dick handled
'Manually induced Peyronies disease,' according to the medical report.
That must have hurt ...
Pretty ballsy, no? They demand money back from their ex workers? Maybe its time some if them get a new job as whistleblowers.
that sure seems like the next domino to fall (never piss off those who know where the bodies are buried)
astute observation, Seasmoke!
Ex-bankers in the OWS crowd?? How ironic. Seriously, I think there are too many over-priced bonuses on wall street but if the banks are stupid enough to pay the huge bonuses, I don't see why the bankers should give them back. I sure wouldn't. If government decides it is okay to take your earned money, we are all in trouble. Wait a minute....
pms?
CEO's of banks, central bankers, politicians, and officials need to go to jail and/or be face the same judgement that dictators do for their crimes against humanity and until this happens stories like these only poke at justice being served.
It just is never ending, am so glad not involved in any of this crap. Anyone who trades this market is either a genius or a glutton for punishment and the holder of a warped mind to think you can beat a rigged fixed system.
Yeah I tried to short last week and got stolpered.
Not doing that again.
you didn't call the TOP?
The banking class is eating its own? You know things are SERIOUS when they go after people who have real money instead of the plebs.
The big name robber barons don't have to pay back jack sheet. This is for the lumpen only.
Just another reason for people of means to engage a qualified asset protection lawyer. People cannot claw back what you do not own. My guess it is the threat of black listing that would make people comply, if at all, and some allegation of fraud or misreprentation in their employment.
Oh hell! We're screwed! There's no way the 1%-ers can give us jobs now.
And smoke cigarettes while doing so.
Sure, like that's gonna happen! The $$ is spent, blown into the wind and/or parked outside of US jurisdiction. Planes are idling and ready to depart one way into paradise for the crooks.
At least the coverage from 3rd world tin pot dictators is brutally honest and direct to the point. The sentiment and the lack of respect for anyone else is the same there as it is on Wall Street.
A thief is a thief is a thief!
Claw this back [grabs crotch]
-John Corzine
+1000 Bob...I guess they can't clawback any funds when the 'Honorable' former CEO indicates he has no idea where they went....Corzine - Totally East Coast Thug Bitchez!
But.. but... now the "top talent" will surely flee the banks. Each of them must be guaranteed millions per year to stick around, don't you know. And if you can't give them millions, all the top talent leaves for greener pastures somewhere. This is just known. No, clawbacks won't do.
And without the "top talent" manning the banks, where will us poor Main Street shlubs get our "financial innovation"?
chet asked:
We can always cut out the middleman and just burn our paychecks.
So Jeffries can demand bonuses back, but when the commingling is unearthed, they won't have a clue where the money's gone!
Double standard bitchez
how on earth could that practice even be LEGAL?!??!?!?!!?
It is as legal as using customer segregated funds to support your firm's trades & then providing the JP Morgan SUPER PRIORITY over their claims...Truth always prevails - Thugs will be Thugs!
PAYBACK is a bitch
literally
Looks like these bankers will have to create some new Excel models to monitize their sadness.
Oh wait, Jefferies is on the verge of collapse.
Social Darwinism remains in FULL TREND - Wall Street will now eat its own!
And vomit? Or disappear into an event horizon? Or just simply die?
+1MM - MsCreant - From your mouth to God's ears! I am not too particular so any of your suggestions would be more than acceptable...
alittle off the theme but some Sino news via BNN,
Sino has announced they will skip payments due in 3 days
I'm not a lawyer, but I was personally involved in a case here in California (as a jury foreman) involving sales commission clawbacks. In California, they are clearly illegal. Any lawyers want to enlighten us about the legal dimension of clawbacks ?
If the transactions were fraudulent and the perps misappropriated client funds for their own gain.. it is totally legal.
SEC does it all the time when they're not surfing porn.
Sounds like something a fisical sound company would do....
A new FASB rule 'BITCHES'- BONUS IN TOTAL CIRCULAR HOLDINGS ENCUMBERED SEGREGATION- aka-->'Fully REFUNDABLE Bonuses Allowance' - the newest & fastest growing footnote to US Bank's financial reports!
Remember when the bankrupt financial institutions stole our money to pay for bonuses for all those brilliant agents of insolvency? They often repeated they needed to offer those bonuses in order to attract the best and brightest. Turns out many of those best and brightest are actually mediocre and expendable.
"I don't know where the money is".
How can they legally claw back bonuses unless the firm goes bankrupt?
libertarian86.blogspot.com
This is like National Lampoon's Christmas Vacation where Chevy Chase buys a pool and then doesn't get a Christmas bonus.
OH THE HUMANITY! (A small tear traces its way slowly down my cheek.)
Rich Handler is a prick. If they treat their employees like that imagine their regard for their customers.
I bet when the banking system goes bust, the bankruptcy trustee is going to claw all the dough back from the guys who took their dough out at the last minute. Stupid Bush and his clawback provisions.
With the precedent that depositors can become unsecured creditors and say BoA goes bankrupt, how do you think main street would react to seeing their last 3 months of electronic payments (housing payments, utilities, etc) clawed back from places they transmitted [for each account holder] by the trustee / bankruptcy judge?
I don't put ANYTHING past our 'justice' system at this point.
What a joke.
Claw backs are not uncommon. Back in 2001 many tech companies were deducting previous bonus payments hey had made to various mid-level execs. Not too nice since many had already relied on that money.
There should have been clawbacks for all of the "bankers", really Sham Wow salesmen that sold all the CDO's to pension funds. Hello Sandy Weill?
That could not/ did not happen then, but is this the begnning of a new round of suits from lawyers for pension funds? The lawyers won't mind. the work...
"will likely cause a substantial dent in banker spending patterns"
Transalation: fewer watch ads in the WSJ
What about the loans that wall street people took on the paid as bonuses