Morning Coffee: Hedge fund analyst's attempt to sue boss for $134m went badly. The management lore of Brian Moynihan at Bank of America

The life of a hedge fund analyst is not what people imagine. While the imagination might suggest exciting and consequential investment analyses, protein-based diets and fast cars, this is not always so. As an analyst, your analysis and ideas may be ignored, your working days may be long and your pay is often decided entirely by your portfolio manager, who may decide to give the money to himself. It can be a terrible job.  

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For the past few years, one London hedge fund professional, who began as a junior hedge fund analyst and progressed to becoming the 'right hand man' of a top portfolio manager (PM), has been locked in a battle with his former boss. Having worked 12-18 hours a day for a PM who was the son of a friend of his mother, Jacopo Moretti was fired after reportedly losing $86m and being off sick for a year. Moretti then claimed that he had been unfairly dismissed and that his boss had been "coercive, controlling and abusive." He attempted to sue this boss in a British court for £100m ($134m).

Moretti may now regret that endeavour. Last October, a court decided that Moretti was entitled to no more than $2k in compensation for procedural irregularities in his dismissal and charged him $40k in translation costs. Last week, another court decided that he also has to pay £1.6 million ($2.1 million) to the cover the legal costs of his former boss after bringing such a vexatious case with no reasonable chance of success. Much of the case was based upon secret recordings of the boss, whom Moretti said had been using anti-Semitic language. The judge, however, ruled that Moretti "“was at least in part motivated by desire to cause maximum embarrassment and potential reputational damage..."

Moretti didn't respond to a request to comment for this article. He told Bloomberg: “The tribunal upheld my unfair dismissal claim, while most of the remaining claims were dismissed. Obviously, I am disappointed with the outcome.”

Moretti's case might be taken as a warning for hedge fund analysts with grievances. Aside from the very long hours and his boss's possible volatility, Moretti's life in employment may not have been entirely bad. He was reportedly paid $2m a year and now has a 1974 Porsche 911, a £1.7m flat in London and shareholdings in 13 private companies. The tribunal said Moretti has been living in Monaco. 

Moretti has nonetheless reportedly argued that he will not be able to pay the £1.6m. The court ruling reportedly stated that his lawyers are no longer acting for him after he was unable to pay their bills. 

Separately, Brian Moynihan, the well worn CEO of Bank of America, has been reflecting upon his long tenure and what it takes to run a big bank.

Moynihan has been CEO of BofA since 2010 and seems to have little intention of moving on. Speaking to the WSJ, he says relaxes by reading spy novels and is currently reading a great book about cod. 

If you want to manage a large bank like BofA, Moynihan says it's all about process. If you're trying to make decisions about everything "you're dead." 

You also need to remain "fresh and relevant." Sometimes there are issues. Sometimes you hire people who don't work out. Moynihan suggested BofA isn't doing much hiring anyway. - He noted that the bank had 285,000 people in 2010, which rose to a peak of 305,000 people and then fell back to 211,000 people. Headcount will be even lower in the future, said Moynihan. BofA has to hire 1,000 people a year to cover attrition but it's also 14,000 people internally to optimize those it already has.

Moynihan's rival is Jamie Dimon at JPMorgan. Moynihan praised Dimon but he also said "all things come to pass" when asked about JPM's superior stock performance and didn't elaborate upon whether this was a joke. 

Meanwhile...

It's a fine time to be a UK M&A banker but not a UK ECM banker. The value of M&A targeting UK companies is up 250% this year at $150bn. This is the highest it's been since 2015. However, only two IPOs have been priced this year in the UK. (Bloomberg) 

Citi is feeling excited about expanding in the UK. It wants to be number three and is currently fifth and is spending some of the money freed up from its 'transformation' to achieve this. “We are investing in investment banking talent with private equity M&A and exits in mind - there will be more hires.” It's also moving into a new office with a beacon at the top for parties. (FN)

Maybe Michael Grimes will not win the SpaceX IPO for Morgan Stanley. (X) 

One moment ClearStreet was going for an IPO. Now it's got a new CEO and is cutting 52 jobs, mostly in engineering. (Bloomberg) 

Crypto exchange Kraken cut 150 people after eliminating some AI technology that was efficient. (Bloomberg) 

State Street will still open a new operating centre in Al Ain, Abu Dhabi. And Partners Capital opened its first Abu Dhabi office on Monday. (FT)  

The UK is relaxing its ringfencing rules. Banks will be given “an allowance” worth up to 10 per cent of their ringfenced assets adjusted for risk and will be allowed to conduct more hedging activity through derivatives inside the entities as long as they support the "real economy." (FT) 

UBS trades at about 1.5 times book value — a standard valuation metric for banks — compared with 2.9 times for Morgan Stanley. (FT)

Morgan Stanley hired Sebastian Bladt from JPMorgan in Germany. (Bloomberg) 

How it is when you retire from banking: "My diary resembles a productive life.... I recently spent an hour on a video call that began as an invitation to join an advisory board and somehow morphed into a pitch for me to invest in a pre-revenue start-up and help raise money for it..." (FT) 

Iris Sun principal investor of the global flagship fund at 500 Global in Palo Alto, tries to observe and nurture founders’ soft skills by hanging out with them. She recently invited one 21-year-old founder she was about to invest in on a 4 a.m. hike to see “whether he properly showed up.” (WSJ)

The pandemic was a good time for completing a Goldman Sachs internship while pregnant. "I interned as a summer associate through my first trimester, turning my Zoom camera off, throwing up, and turning it back on." (Business Insider) 

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