Source: Business Insider
There were customary embarrassing instant messages and e-mails released in the complaint, and banks paid out billion dollar fines, but it was still hard to get people to pay attention to such an obscure number. The scandal just wasn't quite salacious enough.
But now it seems that element has arrived. Regulators suspect that London's high-flying banking culture led to an attitude that welcomed deceitful, conspiratorial behavior between traders and brokers, the WSJ reports.
Traders and brokers are bonded together because brokers make handsome commissions from executing trades. It's a "symbiotic" relationship, the Journal points out, and in London the rules about "trading favors" are looser than they are in NYC. Banks could easily spend $50,000 on a single trader.
This, regulators say, created the perfect environment for something like the Libor scandal. In order to get traders to work with them, brokers allegedly gave traders early access to lucrative trades, bought entire trading desks lunch, flew them off to Vegas, procured cocaine and prostitutes for traders, and dropped straight cash at strip clubs.
The Journal describes helicopter dates ...
As recently as last summer, BGC Partners Inc., a New York-based brokerage, dispatched limousines to the homes of top traders at London banks. The limos ferried the traders' wives and girlfriends to a helicopter, which flew them to the Royal Ascot—a marquee event on London's social calendar—for a day of horse races, according to people familiar with the event...
A broader probe into the entertainment of trading clients by other brokers at Tradition, majority-owned by French financial-services company found evidence that some Tradition brokers hired prostitutes for traders, and took the traders to an outfit called Lady Marmalade Adult Parties, say people familiar with the investigation. The website of Lady Marmalade says it operates from a four-bedroom apartment in central London, equipped with an "erotic love swing," promising customers "an orgasmic time."
The WSJ says that brokers admitted that after a wild night out with traders, there would be a line of trades on their desks waiting for execution the next morning.
That's what you do for your friends, no?
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