Morning Coffee: Ex-Goldman Sachs associate's weird trick on Goldman bankers. Credit Suisse HRs deemed incompetent
Samir Rao was once an associate at Goldman Sachs. After studying mathematics at Harvard University, he spent four years at Goldman in NYC in the shadow of the financial crisis from 2008 to 2012. Then Rao quit to become an entrepreneur, and became quite successful: he co-founded Ozy Media, a media company producing TV, podcasts and news for the 'change generation' with Malcolm Watson, another ex-Goldman banker. By 2019, Ozy claimed to have 50m unique users a month.
Ozy also had some big investors. Axel Springer and media-focused investment bank LionTree were among those who'd invested an estimated $80m by 2020, but the company wanted more money and so in winter 2020, it was on the verge of securing a further $40m from Goldman Sachs' (presumably the merchant banking division), at which point Rao appears to have been a bit wild.
The New York Times reports that Rao was having a hard time in winter 2020: he had mental health problems and was struggling, according to Watson. As the Goldman money loomed into view, Rao seems to have decided to try nudging the Goldman bankers into overcoming doubts about Ozy's real audience size by impersonating a YouTube executive on a conference call and informing the bankers that Ozy's YouTube videos were a great success and a big generator of advertising dollars.
It might've worked, were it not for the fact that Rao's voice on the call, "began to sound strange to the Goldman Sachs team, as though it might have been digitally altered," and that one of them subsequently emailed the secretary of the YouTube executive on an email different to the one provided by Rao on the call. The secretary didn't know who the Goldman bankers were.
Watson subsequently apologized. Rao - seemingly - got treatment and is still working for Ozy, while being the subject of a possible investigation by the FBI. Watson told the New York Times that Rao has now recovered and that writing about the incident was unethical given his illness. Presumably, Ozy didn't get the investment after all.
As bankers get back to travelling, the incident might be seen as an argument for meeting in person instead of on a conference call (Rao asked to shift to a call because he said video chat wasn't working). It might also be seen as an affirmation of Goldman bankers' astuteness that they recognized that the strange voice on the line wasn't someone with a sore throat or electronic larynx. It also suggests that ex-Goldman associates probably have the most insight into what makes current Goldman managing directors tick: if you want an investment from the firm, impersonating a satisfied client is the way to go.
Separately, after all the accusations and intimations of incompetence at Credit Suisse, a new group of staff at the Swiss bank have been deemed unfit for purpose: the people in HR.
Credit Suisse's London HR team has been fined the maximum amount of $27k for its egregious failure to follow procedure when making staff redundant in summer 2020. The judge said the fine was merited because the omissions were “so extensive and so obvious”, and because Credit Suisse's HR team was “substantial and well-resourced” and really should've known better.
The bank failed to inform staff in writing of the reasons for their dismissal and didn't divulge the numbers affected.
Meanwhile...
M&A bankers are no longer at their country houses with their chickens. “We are absolutely getting back on the road,” said Alison Harding-Jones, head of M&A for EMEA at Citigroup. (Financial News)
The SPAC boom is over as investors redeem their cash. The average redemption rate in the first quarter was 10%. In the third quarter, it was 52.4%. (Financial Times)
Credit Suisse intends to return $400 million to investors in supply-chain finance funds that invested in Greensill. It's returned $6.3bn in total. (Bloomberg)
Evergrande is different because it's in China. The Chinese government is expected to guarantee Evergrande's debt after first making investors sweat. Beijing controls the Chinese banking system, where big lenders are state-owned companies that prioritize the government’s economic policy. These banks have already been negotiating opaque deals with Evergrande. (New York Times)
Women seem more burned out than men. About 42% of women told McKinsey & Co. they felt burned out often or almost always, compared with 35% of men. Among female team managers, more than 50% said they were burned out, while 41% of their male peers did. (WSJ)
Scaramucci says institutions aren't investing in crypto. “The institutions are not there. Anybody who’s telling you there’s institutional adoption into this space is not being totally honest -- or they’re seeing something that I’m not seeing.” (Bloomberg)
A Danish artist was given $84k in cash to recreate a piece of art about incomes. He took the money, didn't produce the artwork, and changed its name to "Take the Money and Run." They're thinking of reporting him to the police. (Bloomberg)
Reasons rich adults are hoarders. (Vice)
Why running a fintech startup is not the same as running a hedge fund, by a former hedge fund manager. (Sifted)
Photo by Bhargav Panchal on Unsplash
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