That Was The Year That Was - 2007 (May - June)

Here's a note of the stories which made the headlines in May and June 2007.


The Wall Street Journal reported that UBS was to close down its Dillon Read Capital Management hedge fund, which was launched a couple of years back, after it sustained first quarter mortgage securities trading losses of around $150m.

US prosecutors arrested a former Morgan Stanley financial analyst and her husband, a former VP over at ING Investment Management, claiming that the couple traded on non-public information and made up to $600,000 in illicit profits. Jennifer Wang, 31, and Ruben Chen, 34, of Englishtown, New Jersey, were accused of using non-public information for financial gain. Ms Chen is accused of stealing information from Morgan Stanley about the securities in three companies and passing this on to her husband. It was alleged that the couple carried out their trading through an account set up in the name of Ms Wang's mother.

The Financial Times reported that Bank of Montreal's mark-on-market commodities trading losses had increased to $US619m. The losses stemmed from incorrect valuations of the firm's natural gas portfolio. Two traders were now said to have left the company.

Bloomberg reported that Bank of New York (BONY) was being sued by Russia's Federal Customs Service, which sought $22.5bn in damages in respect of alleged money-laundering activities said to have taken place in the late 1990s.  


Zain Latif, 23, graduated with a Masters from Cass Business School at the tender age of just 19. He secured internships at both Goldman and JPMorgan, before joining HSBC's graduate program in 2004, which led to stints in trading in New York and Hong Kong. He returned to London early in 2006, joining the bank's newly formed Illiquid Assets Group. Finding it tough operating in more established emerging markets (where competition was fierce), Latif decided to scour for opportunities in Africa, and particularly Nigeria. And he didn't have to wait long for his first major success - bringing the first unrated Nigerian bank, FCMB, to the international markets in a debt / equity hybrid structure with a combined facility of $125m. The publicity surrounding Latif's coup clearly gave him a high profile, and it wasn't long before headhunters came after him to tempt him away with promises of untold riches. Turning down lucrative offers from a number of other financial institutions, Latif resigned his position at HSBC for Merrill Lynch, coming in at VP level to help build their illiquid assets business, with prime responsibility for Africa. He is said to be possibly the youngest VP ever in the City.

The Wall Street Journal reported that the US Equal Employment Opportunity Commission (EEOC) had filed a lawsuit on behalf of Majid Borumand, a former senior IT programmer with Merrill Lynch in the US, who claimed that he was discriminated against and eventually fired from the firm as he was Muslim and from Iran. The newspaper quoted from the lawsuit, which alleged that 'while employed at Merrill Lynch, Mr Borumand was subject to a number of remarks that reflected animus towards his national origin and religion, including but not limited to being told that 'the reason that you are not allowed on the trading floor is because you are from a country which has a high risk factor and (is) a threat'.

Bear Stearns Private Equity took the unusual step of issuing an announcement to The London Stock Exchange about various media reports involving two hedge funds managed by an investment team within Bear Stearns Asset Management that invest in asset-backed securities, with exposure to the sub-prime mortgage market. Bear Stearns Private Equity Limited said it had not invested in these hedge funds and was managed and administered by a separate investment team. At the time we wondered what this was all about. All was soon to become clear.

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