The Stakeout
When I first move to Hong Kong in 2004, Iâm seated in the middle of the trading floor, across from the credit traders and flanked by salespeople. This proximity is insane; everything I work on all day is the very definition of non-public, market-sensitive information. Everyone around me can see my screens and hear me on the phone; they can even listen in on my calls if they want.
Generally, Iâm encouraged to take nonpublic conversations off the deskâeither into a conference room or to the other side of the Chinese Wall, which in this case is an actual glass wall separating banking from sales and trading. But thatâs simply not practical all the time.
No one seems to really care that itâs illegal, so I donât worry about it. Besides, salespeople and traders are more fun to be around than investment bankers. Being in the middle of the action allows me to stay in tune with markets in real time, helping me provide more thoughtful and relevant advice to our clients. Traditionally, thatâs always been part of the argument for keeping syndicate desks on the trading floor.
Typical scenario, Iâm allocating a deal and I sense Jimmy (a sales guy) looking over my shoulder. âWhoa, whoa. You canât give Rooâs client more bonds than mine.â Or, I hear a sales guy talking to a client: âHey, Iâm hearing that thereâs a big Hutch deal coming next week.â Heâs obviously heard this from listening to me on the phone, and it is the kind of sensitive information that a client could use to trade on. Thatâs when I know that I need to change seats.
I move to the very corner of the trading floor, sitting among the IT guys and the business unit managers. The BUMs are the people who are responsible for managing the expenses of the trading floorâfrom Herman Miller chairs and extra screens to stationery and color ink cartridges, it all runs through them. Most important, they sign off on our T&E, or travel and entertainment.
My new seat gives me an expansive view of the entire trading floor. Across from me is the credit research and strategy row, and then trading and credit derivatives, then credit sales, and then interest rate products and structured credit. There are another ten rows of people beyond that, but I only really care about my direct universe.
Sitting among the BUMs and IT guys feels like being at the lunch table with all the kids I made fun of in high school. I have more interesting conversations with my dentist. However, it does come with a few perks.
I no longer have to worry about expensing my numerous dodgy receipts. My new buddy, the BUM, will handle that. In fact, one of my colleagues, Peter, is so tight with the BUM (they both have and love a certain brand of German automobile) that heâs able to expense his dirty karaoke trips, no questions asked.
Peterâs a hero to the Latin American borrowers and New York coverage bankers who come through on their fake roadshows, under the guise of flogging subordinated perpetual non-call ten-year hybrid Tier 1 notes to Asian retail investors (mom and pop). These coupon-hungry âinvestorsâ know about as much about these structures as they do the Lehman minibonds theyâve dumped their retirement savings into.
Many of these issuers donât really need to do a roadshow, but thereâs an entire team of bankers in New York calling them, saying, âHey, how would you like to go on a one-week tour of Asia? Iâll go with you.â
By day, they meet with private banking sales teams who care more about their own commissions than the underlying credits theyâre selling. Invariably, the issuers and bankers carve out ample time for suit fittings and watch shopping. At night, they want Peter to take them for a nice Chinese seafood dinner followed by a visit to an exclusive karaoke bar, where they charge hot-dog-at-Yankee-Stadium prices for hookers.
At the end of the night, Peter receives a bill that says something nonsensical like Kyoto Toro Fuji Sushi Restaurant, which of course is what makes it possible to expense. Being best friends with the office BUM also helps.
Another great benefit of sitting among the guys in short-sleeved dress shirts and square-toed shoes is that we get a heads-up on the fire drillsâthe actual fire drills, not the circle-jerk bake-off pitches that junior investment bankers refer to as fire drills. This sounds trivial, except for the fact that for many of our fire drills, they shut down the elevatorsâand weâre up on the forty-eighth fucking floor.
Iâll get a five-minute heads-up, which is just enough time to discreetly and selectively spread the word to my friends. Weâll be on our third beer at the bar in Hong Kong Park by the time everyone else, exhausted and sweating, is spilling out of the ground-floor stairwell.
One day, Ken, the IT guy, spins his chair around. âOi, geezah. I saw yer mate last night at Fenwickâs. Bloominâ three oâclock in the morning. He was there. Clear as mud, I saw him. He was by âimself. Fookinâ big cigar, he âad. Talkinâ to some bird. Didnât leave by âimself though, did he. Fookinâ Dirty Sanchez.â
Itâs taken me almost a year to learn how to understand how Ken speaks. âKen, are you trying to tell me that you saw Dirty Sanchez at Fenwickâs, by himself, smoking a cigar, and that he left with a hooker?â
âIs wot I said, innit?â
I have to repeat myself. âKen, are you saying that you saw Dirty Sanchez do a late-night solo Fennieâs smash-ânâ-grab at three a.m. on a Tuesday?â
âAre you retarded? Yeah, I saw it wif me own eyes.â
I still donât really believe him. I believe that he believes it, but I donât believe it. Fenwickâs is a dark and dingy basement firetrap of a bar in Wan Chai, and is probably the most famous and least discreet stop on every depraved touristâs Hong Kong whore tour. There is no way that this guy, who has hundreds of subordinates and is known to every major buy-side client in the region, can be so blatantly injudicious, if for no other reason than that his own wife works in the industryâÂbanking, not whoring.
Dirty Sanchez is our regional head of
. He lives in Singapore but makes very frequent trips to Hong Kong, always opting for the âmanagement flight.â The management flight is when you intentionally pick flight times in the middle of the day, so that you can have a leisurely morning, then lounge, drink, eat, and sleep your way through the meat of the day, finally arriving at your destination just in time for late-afternoon team drinks.
The genesis of his nickname, Dirty Sanchez, or Filthy for short, has nothing to do with any deviant proclivity; itâs simply a reference to the pet ferret he keeps above his upper lip. This nickname, which he is not aware of, was actually given to him by a prominent hedge fund manager.
What makes the Tom Selleck homage even more ridiculous is his pairing of this voluminous womb broom with the worst comb-over any of us have ever seen. Itâs so bad that if you ever have to walk with him to a meeting on a windy day, he forces you to keep changing directions as he attempts to prevent his homemade hair hat from flapping up and saying hello.
Of course, no one is really surprised by the idea of infidelity or carnal indiscretion. Itâs a fairly standard industry practice and certainly not an aberration exclusive to Asia. One of my bosses in London lived in a palatial home on Holland Park but also owned a flat in Mayfair that his wife didnât know about. He was well known for arranging an FBT (Fake Business Trip) and staying in Mayfair with one of his side chicks. The issue with Filthy is that he is so sanctimonious that having a solo Fenwickâs game would be off the charts.
A few weeks later, Iâm at my desk when Ken strolls in midmorning, looking rough and smelling like stale beer and two-week-old sheets.
âFookinâ ruff night, it was. Killed two birds wif one stone, if u get me drift. Was leavinâ wif one and âere comes walkinâ anovah wif massive tits. âEllo, luv, right, ur cominâ âome wif me. Shagged âem bof in tha bum. Mate, when I woke up, me bed looked like a butchahâs block. Was afraid I mightâave committâd a murdah.â
If I spun around every time I heard him say something like that, Iâd never get any work done; so I just ignore him. Ken keeps going. âOi, u âearinâ me? Saw ur mate again. two oâclock in tha morninâ this time. I was cuntâd, maybe fifâeen lagers in me. But it was definitely âim olrite. Iâd bet me mumâs life on it. And I like me mum very mutch.â
We can settle this right now. It just so happens that Filthy is in the office, standing three rows across from me, talking to a few of his salespeople. âKen, stand up. Come over here.â I pull him closer to me and point across the floor. âKen, first of all, heâs not my mate. But I just want to be clear. You saw him, that guy right there, by himself at Fenwickâs again last night?â
âToo right, mate. Iâm not a fookinâ id-i-ut.â
I immediately start firing off Bloomberg messages to some syndicate and sales colleagues and friends, as well as to a few clientsâall of whom are well aware of the running joke that is Dirty Sanchez. âItâs confirmed. Filthy has a filthy solo Fennieâs game.â The problem is that without definitive proof, there is still this lingering doubt. A close friend and former colleague turned competitor proposes a solution: a stakeout.
The chances of success seem sl...