This afternoon in the Raj trial, we gained more insight into the wonderful world of bankers, from a Morgan Stanley man, Owen O’Keeffe — a witness for the government.Specifically, we learned about a contest men on Wall Street enter many times each year: a “beauty contest,” or a “bake-off.”
O’Keeffe was called by federal prosecutors to introduce Kamal Ahmed, a Morgan Stanley executive who is alleged to have provided someone — whose identity is unknown — with information about AMD’s merger with ATI (which the bank was working on), who then provided that information to Raj Rajaratnam in ’06. Apparently Ahmed didn’t even know Raj.
Anyway. Back to the men playing games.
Federal prosecutor Jonathan Streeter commenced his direct questioning of O’Keefe, a tall, tanned man in a yellow tie, with banker-ish hair and a blue shirt. Everything was going along smoothly, everything was normal — there were questions about AMD, another company called Vishay — and then Streeter said: “Mr O.Keefe, what is a bake-off?”
(The subject of one of the emails shown today as evidence, later on, was, “Vishay Bake-Off.”)
So what is a bake-off? We didn’t know; we’re guessing those among you who aren’t bankers don’t know either. So here’s what we learned from O’Keeffe.
He explained that a bake-off is when a bank goes to a firm and explains to that firm how they (the bank) can help the firm, what their capabilities are, how they can be helpful… And they’re doing this at the same time as other banks, who also want the firm to pick them as a financial advisor.
Streeter asked to what a bake-off refers… O’Keeffe then began to talk about who can make the best cookies… and then decided on “who can make the best baked good.”
So yes, this bake-off, is just another way of saying, “we’re pitching” and we’re competing against others who are also pitching.
But, at least at Morgan Stanley, they don’t call it a pitch — they call it a “bake-off!” In emails, as we saw in court today, it’s called a bake-off.
(It’s also a verb. For example, in an email shown today, a banker wrote to another banker, saying, “We will be baking-off on Friday…”)
And when Streeter asked what else, besides “pitch”, bankers may call this process, O’Keefe replied: “A beauty contest.”
Which is even better!
O’Keeffe did make sure to mention, “I don’t personally… but some do.”
Sadly Morgan Stanley didn’t win the bake-off in the Vishay deal.
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