The Spider Network by David Enrich

Author:David Enrich
Language: eng
Format: epub, mobi
Publisher: HarperCollins
Published: 2017-03-20T16:00:00+00:00

Chapter 13

A Slap on the Wrist

“Who manipulates yen Libor?” Guillaume Adolph asked Mirhat Alykulov one day in late September 2009, a few days after Hayes left UBS for the last time. “I have a bad feeling somebody is.” Coming from Adolph, it was a bizarre question, apparently intended to somehow manipulate or extract information from Alykulov. With Hayes’s departure, the Kazakh had been elevated a rung or two at UBS and now was interacting directly with more brokers and rival traders, such as Gollum.

“Sometimes Citi and Chase are fucking around,” Alykulov said, playing dumb. “Can’t stand them moving it up and down.”

“Bullshit,” the fiery Frenchman responded.

“What’s bullshit?”

“Tom was setting the Libors he wanted.”

“Nah,” Alykulov said, “our guys in Zurich don’t even wanna talk to us on Libors.” The lies zipped back and forth between the two competitors.

It wasn’t Alykulov’s only relationship built on a dishonest foundation. Read dished out advice to the newly mentor-less trader about what he could do to nudge Libor in helpful directions. “Mirhat, you realise that you have the ability to influence the three-month fix,” he pointed out on one occasion. Alykulov thanked him.

Read, however, was running out of steam. He and Joanna had bought a dilapidated villa that they planned to renovate—a “hovel,” Read called it. The coming year, Read would collect roughly $1 million in salary and bonus, but to save money, he planned to do some of the home improvement work himself. When not with hammer and paintbrush, he hoped to spend time watching the local Wellington soccer team, which was suddenly winning games thanks to the import of an aging star from England. It was time to wash his hands of Alykulov.

“You have been a pleasure to talk to for these past few months but the more I have thought about it, the more I think that you talking directly to [ICAP’s Japanese affiliate] will work out best for UBS,” Read e-mailed. “Tom will be under intense pressure to ‘produce’ early on and, as a result, he will be even more unreasonable than normal . . . lucky me!”

Alykulov, however, wasn’t quite ready to let Read go. Over Christmas, he repeatedly complained to Read that his ICAP colleagues in London weren’t doing enough to knock six-month Libor lower. Read e-mailed Wilkinson about the earful he was getting. (Wilkinson, coming off his best year ever, was due to collect nearly $2 million in salary and bonus.) Alykulov and Hayes, Read explained, were both under the false impression that Goodman “talks individually to his banks and exerts his views in that way.” Read had spent years cultivating the illusion that Goodman was doing more than he really was; he didn’t want Wilkinson to shatter it with some offhand comment.

* * *

It didn’t take long for Hayes to figure out that Citigroup’s culture was different from UBS’s. Sure, on the face of it, there were some striking similarities. Over the years, through countless acquisitions orchestrated by hard-charging CEOs, both had been transformed into earth-spanning behemoths

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