A really bad few days - 'Silly season' not so silly this year

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A 'flash freeze', a big trading error, the death of an intern, enticement charges, and a suicide - all in the space of a few days.

The last few days in August are traditionally known as 'silly season', due to the fact that (what with holidays) there's no real hard news out there, and desperate journalists pump out a series of lightweight articles to fill their article quotas.

This year, however, it was very different.

On August 22nd, there occurred what has now become known as the 'flash freeze', when trading in thousands of U.S. stocks ground to a halt for much of the day after an unexplained technological problem shut down trading in Nasdaq securities.

Nasdaq has now accepted some responsibility for the 'flash freeze' - but only some.

Earlier that week, that Bank of America said a 21-year-old intern died one week before completing a summer program.

Moritz Erhardt, who was on a seven-week pre-graduate program in London, died August 15th, after colleagues said he had worked for three nights in a row.

Bank of America Merrill Lynch has now launched a review of its work practices.

And Goldman Sachs is thought to have lost tens of millions of dollars after a computer glitch led to a flood of erroneous options trades.

An upgrade of Goldman's internal system is said to have affected options on stocks and some exchange-traded funds with symbols beginning with the letters H through L, leading to trades vastly out of line with market prices.

Goldman is said to have placed four senior technology specialists on administrative leave after a programming error.

Then there was the case of the Goldman Sachs banker accused of sexual assaulting a 20-year-old woman during a naked pool party in the Hamptons.

Jason Lee, who is managing director of the firm's equity capital markets group but has been placed on leave since his arrest, was charged with first-degree rape.

And a former Bank of America VP who was arrested last month by the Delaware Child Predator Task Force is now facing federal charges of attempted online enticement of a minor.

Kirk A. Simmons, 59, of Stirrup Run near Newark, has been taken into federal custody pending a detention hearing set for September 3.

Finally, Josef Ackermann, the chairman of Zurich Insurance Group (and former Deutsche Bank CEO), resigned this week after indicating that he felt pressured to take part of the responsibility for the death by suicide of Chief Financial Officer Pierre Wauthier.

It has now emerged that Ackermann was mentioned in Wauthier's suicide note.

Let's hope things get better in September.

image: © Valerie Everett

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