There was a joke going round when I worked on Wall Street that raised a chuckle back then, but would almost have you reporting yourself to HR these days.
'What’s the difference between a client and a sales guy ?' Well, the client gets to say @sshole before putting the phone down!
You see, there’s always been a bit of friendly banter between investment bankers and the clients they aim to serve. Everyone knows it’s a game - you take a bit, you give a bit. Investors try to reward service, and bankers look for opportunities to take their cut. But essentially everyone is in the markets for the same thing - to make money.
In analysing the text and chat room conversations from the recent FX rigging scandal, it’s interesting just how modern technology allowed groups of traders to get together to cheat their clients. Never has a case of 'us and them' been so clearly manifested than in this sorry tale. These guys not only traded the market, they felt they really owned it, and their clients became bit-part players to be exploited. Whereas in previous fraud cases the crimes would mostly be committed by bankers acting alone, in the Libor and FX scandals, we witnessed the involvement of much larger groups.
The extent of the $5.6 billion in fines levied against the banks shows just how serious the regulators are, despite the sense that this is also highly political. However, the experience of recent years warns us of the power of digital communications to encourage criminal enterprise. You only have to look at the numbers of young people encouraged to take up arms in terrorist ventures to see how insidious the internet can be. Compliance officers and market regulators are going to have their work cut out in future years to stay on top the technology.
And remember, - today’s light-hearted wisecrack amongst a couple of market mates can easily become tomorrow’s market rigging scandal!