Every few months, a new set of embarrassing online dispatches escapes from Wall Street.
It’s great for us, we like reading them, but they’re almost always embarrassing, or worse, for the author.
Thankfully for them, some, like Mark Kurland, for example, have picked up on the trend. While giving Danielle Chiesi tips on insider trading, according to Fortune, he told her: “Don’t put anything in e-mail… Be careful.”
Obviously, as exemplified by Kurland and Chiesi, e-mails aren’t the only conversations that can get you in trouble. But they’re easily the dumbest place to discuss priority information. Just look what happened to these guys…
From: Arthur Samberg
To: David Zilkha
Date: 28 February 2001
'im not as impressed with our research on msft. do you have any current views that could be helpful? Might as well pick your brain before you go on the payroll!!'
Date: 06 April 2001
'I own some msft based on the win2000 cycle, despite recurring indications from knowledgeable people that the company will either preannounce or take guidance down. Any tidbits you might care to lob in would be appreciated'
Date: 20 April 2001
'I shouldn't say this, but you have probably paid for yourself already!'
Art Samberg practically asked the SEC to use these emails to charge him with insider dealing. It seems undeniable that Samberg asked David Zilkha for insider information about Microsoft, which helped net his hedge fund $2.1 million. Samberg settled and paid the SEC $28 million.
From: Neil Cotty, Bank of America's accounting officer
To: Joe Price, then-CFO
Date: 4 November 2008
Attachment: Merril Lynch Prelim October Results
'Read and weep.'
Neil Cotty sent this blunt note to Joe Price with the attached preliminary October results for Merrill Lynch that showed a loss of $6 billion. Merger documents had already been sent to shareholders and then, there was BAC's accounting officer writing that Merrill's numbers suck. Five days later, the October loss shot to $7.5 billion.
From: Chad Gifford, then-Chairman of Bank of America
To: Thomas May, director
Date: 16 January 2009
'Unfortunately it's screw the shareholders!!'
From: Thomas May
To: Chad Gifford
As BAC prepared to disclose another series of bleak write-downs after the Merrill merger, director Chad Gifford's charming 'screw the shareholders' email met with an admonishing reply from Thomas May. Basically, he told Gifford to make sure there would be no paper trail of embarrassing or damning emails. Emails that say, for instance: 'screw the shareholders!!' Or emails that say, destroy this paper trail.
From: Henry Blodget
To: Virginia Syer
Date: 20 October 2000
Subject: FW: Handwritten Infospace Annual Report!?!?
'I am so tired of getting these things. Can we please reset this stupid price target and rip this piece of junk off whatever list it's on. If you have to downgrade it, downgrade it... So embarrassing.'
Henry Blodget's emails purported to show that he stock that he actually thought was junk went public after he was targeted in Eliot Spitzer's banks-are-bad rampage in 2000. Blodget settled, was banned from the securities industry and paid $4 million in fines and disgorged profits.
From: Fabrice Tourre, Goldman Trader
To: Marine Serres, one of Fabrice's girlfriends
Date: 23 January 2007
'More and more leverage in the system. The whole building is about to collapse anytime now...Only potential survivor, the fabulous Fab...standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!'
Tourre's email instantly shot him into infamy during the (still unresolved) SEC v Goldman Sachs case. In the end the email wasn't actually as bad as the SEC first made it out to look, but the damage had been done.
It's a little ridiculous the extent to which some of these sexually-charged comments are blown into lawsuits, but it clearly happens too often.