Trader Demands 19 Million Bucks From Barclays

You’d think that making the move from Morgan Stanley to Lehman Brothers in 2008 would be up there as one of the stupidiest moves ever. But if a former gas and power trader wins his lawsuit against Barclays, it might end up as one of the best trades of the year.  

Pat Fitzgerald at Bankruptcy Beat explains:

Maximilian Coreth, who joined Lehman in 2008 as head of the firm’s North America gas and power trading unit, says Barclays owes him the cash because it took on some $2.5 billion in severance obligations when it scooped up Lehman’s broker-dealer business shortly after the investment bank collapsed in September.

The trader, who left his job as a managing director at Morgan Stanley to take the position at Lehman, says his employment contract specified he’d receive the $19.6 million if he was terminated before February of this year.

Coreth’s contract entitled him to a salary of $220,000 and a $9.8 million yearly cash bonus, plus stock. 

It puts a nice underline on the kind of incentive pay Wall Street offered during the boom: take insane risks and get huge bonuses if they work out. If they don’t, and your firm gets crushed, you wind up with a huge severance.

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