DealBook by Ross Sorkin
July 31, 2008
Source (Extra:
Merrill’s CDO’s: ‘They Knew What They Were Doing’ )
From Michael M. Grynbaum, a DealBook colleague:When the history of the Great Market Crash of 2008 is written, perhaps the following will make for a fitting epigraph:
“Market is collapsing. No more $2k dinners at CRU!! The Financials are being invicerated! [sic]”
That cri-de-coeur, penned by a Merrill Lynch executive in an e-mail message last November, showed up in
an 80-page lawsuit (PDF) filed on Thursday by the state of Massachusetts, which is suing Merrill for misleading investors about toxic auction-rate securities. (Cru is
the West Village hot spot whose $78 prix-fixe includes braised Berkshire pork belly and foie gras terrine.)
It was the latest entry in a peculiar genre of poem: the Wall Street confessional. The missives, which first gained notoriety in the Eliot Spitzer era, are making a comeback as a new wave of financial fraud cases pop up in the courts.
Add a few Merrill messages to the canon. Referring to the firm’s auction trading desk, a managing director wrote, “Come on down and visit us in the vomitorium!!” (This came as clients were allegedly advised to snap up the suspect securities.)
Later, after an unfriendly questioner emerged on a sales call, the managing director urged a research analyst: “Shut this guy down. Suggest he call outside this call. He is focusing attention away from your positive message.”
Finally, the same banker used an incriminating metaphor to motivate her sales team.
“The gloves are off and we are not concerned with issuer perception of our abilities and the competition,” she wrote. “Gotta move these microwave ovens!!”