That Was The Year That Was - 2007 (July - August)

Here's a note of the stories that hit the headlines in July and August 2007.


The FBI began investigating letters which were sent to up to 20 US newspapers which threatened the lives of Goldman Sachs employees. The newspapers contacted US law enforcement agencies and, in some cases, warned Goldman direct about the threat of an attack. Goldman itself did not receive a letter. The letters, which are all said to have been mailed from Queens, said: 'Goldman Sachs. Hundreds will die. We are inside'. They were signed 'A.Q.USA'. They were later found to be a hoax.

According to music magazine NME, Deutsche bankers paid a cool $5.4m for an 80 minute set (that's $67,500 a minute) from Mick Jagger and the other Rolling Stones boys, who performed at a party organised by the bank at Spain's Catalan National Art Museum.

UBS ousted group CEO Peter Wuffli, replacing him with his deputy Marcel Rohner. Wuffli relinguished his responsibilities immediately. Wuffli's departure came after the bank had posted two disappointing quarterly earnings figures, lost face and money in an aborted hedge fund venture and seen high profile bankers quit due to differences over strategy. The bank's share price had also been relatively flat.

Stories started to circulate that two Bear Stearns hedge funds were in trouble, and that Barclays Bank may have lost $400m from investments therein. 

Wall Street's finest were banned from taking clients to Times Square restaurant the Hawaiian Tropic Zone. Bankers at Citi, Lehman and Morgan Stanley were told that the restaurant was out-of-bounds as it featured waitresses wearing bikinis. Restaurant owner Dennis Riese, no doubt mighty miffed at the prospect of losing such a loyal clientele, told The New York Post that 'we are a totally misunderstood restaurant.....You're never, ever, going to see a girl nude (here).....No nipples'.

Boston-based Sowood Capital Management LP became the latest hedge fund to come out and confirm that it had suffered from the recent difficulties in the credit markets. The once $3bn hedgie sent a letter to investors confirming that its net asset value had fallen to around $1.5bn, suggesting that up to $1bn was lost in the month of July alone.

Lehman Brothers was forced to come out and deny that it was going to take a big writedown relating to exposure to subprime lending. The firm's shares came under pressure after rumours that the firm had taken a bath.


Rumours began sweeping Wall Street that a large US investment bank, thought to have taken a huge bath in the market turmoil, was going to go belly up and file for Chapter 11 bankruptcy protection. Like many rumours, this one too proved unfounded.

Bear Stearns hit the headlines again, settling on a fall guy for its hedge fund and related problems. President and co-COO Warren Spector was asked to fall on his sword, and did so. Spector, 49, was responsible for fixed income and asset management and bagged $36.9m in comp in fiscal-2006. He was succeeded by Alan Schwartz, who became sole President and COO.

Those prop trades executed in shares in BMW, Metro and Volkswagen earlier this year by former WestLB traders were now said to have racked up losses of around $678m.

Finally, Joyti De Laurey, the former Goldman Sachs PA who managed to nick $8.6m from three of her bosses, was released from Downview Prison in Surrey, having been granted parole halfway through her seven-year sentence.

Have something to tell us about this article?

JefferiesAnd the Best Place to Work in the global financial markets 2018 is...