Fulcrum Dumping Research, Focusing on I-Bank
The combination of large prop trading losses, a touch of fraud and some overly-generous guaranteed pay packages is spelling disaster for the research arm of Fulcrum Global Partners. Despite making $65 million in revenues in 2004, the company is finding it doesn’t have enough dough left this year to adequately compensate many of its analysts. The company’s first flirtation with an acquirer, ill-reputed Ladenburg Thalmmann, ended badly when Fulcrum employees protested with a “sick out” day. It’s now looking like most of Fulcrum’s research pros will be absorbed by research aggregator Soleil Securities, an independent research and stock-trading boutique. Paul Spillane (pictured), president of Soleil, said, “We’ve always had a lot of respect for the people of Fulcrum, and if there is an opportunity, I hope we can make something happen.” Meanwhile, Fulcrum, which was founded in 2001, will concentrate its efforts on the investment banking side of the equation.
Fulcrum Exits Research Business [Institutional Investor]
Fulcrumbles [NY Post]
Big Bonuses for Asian Private Bankers, Energy Traders
From a London trade mag called Here Is The City, more gossip on the bonus front:
And from the “Sharing the Wealth” department, news that Morgan Stanley’s cleaning crew in London is getting a pay raise to $12 an hour. Don’t spend it all at once, guys!
Latest on the Bonus Front [Here Is The City]
Another Senior Defection from Morgan Stanley in London
The brain drain at Morgan Stanley continued last week with the defection of its head of UK banking, Michael Tory, jumping ship to rival Lehman Brothers. This announcement comes on the heels of technology banking head Dhiren Shah’s departure the previous week--all in the wake of John Mack’s taking of the helm. Tory is the third senior MS banker to cross over to Lehman this year. Word has it that Tory did not receive a guarantee from Lehman which we find a little difficult to believe.
Top Morgan Stanley Man Joins Rival [Financial Times]
Is It My Breath? Merrill Turns Off Advest Brokers
Looks like Merrill may not be getting everything it bargained for in its acquisition of brokerage firm Advest: Headhunters are saying that 40% of the target firm’s 500-odd brokers are opting not to sign on with the Bull. “This is going to go down as one of the worst [attrition rates] Wall Street has seen,” said Danny Sarch, president of executive-recruiting firm Leitner Sarch Consultants. The 40% compares poorly with the standard 15% attrition rate in such deals and even worse when lined up against Citigroup’s takeover of Legg Mason Wood which lost only 8% of its brokers. Anyone know why?
Nearly 40% of Advest Brokers Leave [Wall Street Journal]
