Happy Saturday, and welcome to Insider Finance. Here’s a rundown of the must-know stories from the past week:
- How a decade of repairing Morgan Stanley made James Gorman the highest-paid bank CEO on Wall Street
- Lee Ainslie tells investors Maverick Capital is “poised to take advantage” of the post-GameStop-frenzy
- How Robinhood conditioned users to obsessively play the market
- The inside track on the next big innovations in IPOs and direct listings
- Read our roundup of Wall Street power moves
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Generation Robinhood: How the trading app conditioned inexperienced users to obsessively play the market
The app aims to make trading easy and fun for a simple reason: The more users trade, the more money Robinhood makes. The startup’s business model, in fact, is based in large part on what is known as payment for order flow (PFOF) â€” taking the buy and sell orders that users place and selling them directly to large trading firms.
More stories on the retail-trading frenzy:
- SPAC-focused Reddit group is trying to prevent pump and dumps as retail traders throw markets into turmoil
- Citadel and Citadel Securities’ profiles have risen with GameStop frenzy. Now the firms have caught the attention of lawmakers.
How a decade of repairing Morgan Stanley after the financial crisis made James Gorman the highest-paid CEO on Wall Street
Morgan Stanley was nearly toppled by subprime mortgage exposure during the financial crisis. In 2020, Morgan Stanley inked big deals for E-Trade and Eaton Vance and raked in record revenue. CEO James Gorman is now the highest paid bank exec on Wall Street, and the firm recently named a bumper class of new MDs.
Here’s how the bank remade itself over the past 10 years, and why CFO Jon Pruzan told us that it’s ready for a big growth push.
More stories on Morgan Stanley:
- Morgan Stanley just tapped a 34-year veteran of the firm as its first-ever head of cloud and architecture
- Morgan Stanley just named a new operating chief for its tech and operations division
GameStop-ravaged Melvin Capital has an unlikely investor â€” the partners at the Silicon Valley VC Sequoia Capital that backs retail-trading app Robinhood
As an army of retail traders took on some of Wall Street’s biggest names, one of Silicon Valley’s most storied investment firms found itself with money on both sides of the trade.
Sequoia Heritage, an under-the-radar endowment-style fund at the venture-capital firm, was an early investor in Melvin Capital.You can get the full rundown here.
Goldman Sachs names Susie Scher as chairman of its global financing group, and lays out other changes in investment-banking leadership
Goldman Sachs on Wednesday told staff about leadership changes within its investment bank. Susie Scher and Vivek Bantwal will become chairman and cohead of global financing, respectively. Akila Raman, formerly the COO of global financing, will become COO of the investment bank.
More Goldman news this week:
- Goldman Sachs partner Adam Dell has stepped down from his role as one of the leaders on Marcus
Visa just launched a pilot program to help fintechs offer crypto trading, and its first partner is a digital bank focused on the Black community
The payments giant announced Visa Crypto APIs, a set of application programming interfaces that allow Visa’s fintech customers to offer the ability to buy, custody, and trade digital assets held by Anchorage, a federally-chartered digital asset bank.
First Boulevard, a digital-only bank with a goal of increasing financial empowerment in the Black community, is the first customer to use Visa Crypto APIs.
Kirk McKeown is leaving Steve Cohen’s Point72, the second senior data exec to depart the hedge fund recently
Another senior Point72 data executive is departing the hedge fund. Kirk McKeown, who led proprietary research, is leaving to start a business, sources told Insider. In December, Matthew Granade, who oversaw the fund’s data efforts, left amid a firm reorganization.
Other hedge fund news:
- Former Millennium portfolio manager Seth Turkeltaub is launching his own fund
- $US6 billion Schonfeld details a training push called ‘Sapphire‘ to develop new portfolio managers
Other stories readers loved this week
- Databricks exec explains why open banking will disrupt finance the same way open source upended software
- Lazard CEO Ken Jacobs just dropped some clues about how his firm plans to grow its $US259 billion asset manager, which includes scooping up talent from smaller firms and promoting 7 MDs
- Meet 15 top legal recruiting firms to know if you’re looking to make a move.
- A health insurer backed by Chamath Palihapitiya is in the hot seat after a scathing short-seller report. Here’s how Clover Health responded to 4 of the biggest claims.
- Narmi, a fintech that helps banks up their digital game, is looking to double headcount this year
- A fintech aimed at streamlining how student loans are paid off just raised a $US5 million seed round led by Bain Capital Ventures