The City Diary: Goldman packs a punch: Sherwood and Van Praag take their corners
Slackbelly exposes The Good, The Bad and The Ugly of The Square Mile
Sunday 02 May 2010
Is there a schism opening up between two of the most senior people at Goldman Sachs? With the investment bank facing a possible "criminal investigation" by the US Department of Justice over its mortgage trading activities – to go with a Senate grilling and the SEC's civil case – there's rumblings of an internal spat.
The private dispute has exploded over how Goldman should handle allegations into the alleged fraudulent sale of sub-prime financial instruments, as well as the public's wider disgust towards the bank.
In the red corner is "Fat" Mike Sherwood – its joint UK boss – who is said to be unhappy that Goldman is taking such a beating from impertinent observers. He advocates a more aggressive counter-attack. But in the blue corner stands smoothy PR man and Goldman partner, Lucas Van Praag, who argues the bank must box clever, and pursue a more measured (some say humble) strategy. "Mike is furious and thinks that Lucas is being too soft," says a source.
On the potential criminal case, Goldman will only say is that it has yet to be contacted by the DoJ. Developing ...
Crystal ball a little foggy, Mr Mathers?
I see that Credit Suisse is replacing its chief financial officer, Renato Fassbind, with its chief operating officer, David Mathers.
"[We are] very fortunate to have someone as capable and talented as David Mathers to succeed Renato," gushes chief exec Brady W Dougan, before praising his new sidekick's "tremendous" contribution to the bank.
Sadly, Dougan had neither the time nor inclination to utter a similar tribute about Mathers's service to the bank's clients. So allow me to fill that gap. In October 1999, as head of Credit Suisse's European equity research department, Mathers put his name to a paper stating that jittery investors could relax as the equity markets were not about to crash – before adding that technology firms were set to be clear winners. Just two months later the markets ran out of steam ... before slumping by half in the dotcom crash. A Michael Fish moment, some might say.
Sinclair tops the trophy wife index
My congratulations to inventor-cum-entrepreneur Sir Clive Sinclair, 69, and his perky new bride – former lap dancer Angie Bowness, 33 – who I read have wed in Las Vegas. The nuptials propel Sir Clive to the zenith of SlackBelly's Trophy Wife Index (Tycoons) – TWIT – with a score of 36 (derived via a complex algorithm involving subtracting her age from his).
The TWIT includes great captains of industry such as WPP's Sir Martin Sorrell (score: 29); former Benetton boss Flavio Briatore (30); WM Morrison president Sir Ken Morrison (30); and Oracle founder Larry Ellison (25) – along with a few more luminaries it might be politic not to mention.
Still, even those names haven't saved the index from recent charges of anachronism, what with all those "cougar" women dating younger men. Thankfully, gallant Sir Clive has stepped up to prove – once and for all – the old traditions endure.
Topping tale of PR folk and the perils of Twitter
Ralph Topping, the outspoken chief exec of bookmaker William Hill, is known in the City for his colourful views – and famously gave advisers a near coronary last year when calling the entire horseracing industry a bunch of "eejits". Might such outbursts explain why his PR handlers are now desperately trying to dissuade Topping from setting up his own Twitter account?
Four years is no time at all in politics
Bank of England governor, Mervyn King reckons whichever party emerges triumphant following Thursday's election, they will regret it. How novel.
Before the 2005 election, Tory insiders began saying just the same, with one musing: "We'd never say this publicly but maybe this really was a good election to lose. It would have been just our luck to have taken over just at the point where the economy was about to fall off a cliff and taxes have to go up. Let Brown deal with all that and we'll pick up the pieces in four years' time." Who'd have thought it?
Glocer sides with Goldman – and his fans don't like it a bit
Tom Glocer the chief exec of information group Thomson Reuters, has decided to proffer his views on Goldman Sachs's woes (see above). "The intense global criticism prompts me to join the debate," he muses on his blog."No sooner had the SEC surprised the firm and the market with its charges of fraud relating to the structuring and marketing of a 2007 synthetic collateral debt obligation (CDO), than commentators up to and including British Prime Minister Gordon Brown fell all over themselves to convict Goldman as being 'morally bankrupt'. It just seems too easy and too politically expedient to jump on this bandwagon."
This post has not been well received by Glocer's online fan base (one Dolly posts: "Your argument is very weak. Did not expect this from you.") although it just goes to show where the businessman's loyalties lie.
The Thomson Reuters chief was on the infamous 2009 list of people schmoozed by Brown at Chequers – but he still prefers to go into bat for the investment bank. Goldman Sachs, you see, is a major client of, er, Thomson Reuters.
Chequers invitees: heroes of the crisis
Incidentally, the passing of time means that that old Chequers list now reads like a roll call of the heroes of the credit crisis: Sir Victor Blank and Eric Daniels of Lloyds Banking Group; Richard Gnodde, joint UK boss of Goldman Sachs; Sir Fred Goodwin, former boss of Royal Bank of Scotland ...
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