In an elevator in the Chicago Board of Trade Building in Chicago, one guy was speaking with another.
“They ought to take everything he owns, sell it and add that to the money that he stole,” said the guy, referring to former MF Global CEO Jon Corzine. He paused for a moment. “But that’s not gonna happen.”
Bing! The doors opened and that was the end of the conversation.
Ride the elevators at the storied and proud CBOT for a while and you’re likely to hear some version of that conversation again and again. People are mad – no, angry, no – pissed off – yes, very pissed off. Take a step outside the CBOT and you’ll hear a more lively and vocal group of Occupy Chicago protestors, equally outraged – but directed at Wall Street and other assorted targets.
In the aftermath of MF Global’s collapse, amid what many would call a reckless and possibly illegal investment into European sovereign debt, and possibly some illegal accounting moves, Corzine issued the following in a statement when he resigned just a few days after the firm filed for bankruptcy.
“I feel great sadness for what has transpired at MF Global and the impact it has had on the firm’s clients, employees and many others,” Corzine said on November 4.
Of course, Corzine got himself a lawyer and not word has been issued by him since. Not a word about the 1,066 employees who were laid off, a softer term for fired, on November 11. And not a word publicly about what the hell happened to a $633 million shortfall in segregated customer funds. Count the thousands of account holders and all those former employees among those who are very PO’d as well.
What is missing from this saga so far is someone to step up and say, “I’m sorry.” Sorry sure doesn’t come close to fixing the problem. An apology sounds a bit trite these days. But a simple first step of human decency with those you have a relationship with (customers, partners, employees) is to say those two simple words “I’m sorry.” And then get on with fixing what was broken.
That lack of humanity, personality, morality, fairness, awareness – is why so many protesting on Wall Street, LaSalle Street and other major streets in the U.S. are even more outraged. The fact that the financial, economic and emotional damage goes without a hint of regret, or pause for consideration, is one of the reasons protestors and perhaps customers in this industry have lost confidence, respect and trust in the institutions and financial industry.
Looking back at Lehman’s former boss Dick Fuld’s testimony before the Financial Crisis Inquiry Commission on September 1, 2010, there was no sign of anything resembling humility. Fuld said in his testimony that “Lehman’s demise was caused by uncontrollable market forces and the incorrect perception and accompanying rumors that Lehman did not have sufficient capital to support its investments. All of this resulted in a loss of confidence, which then undermined the firm’s strength and soundness.”
After outlining how strong its balance sheet really was in his mind, he got real with the commission. “In retrospect, there is no question we made some poorly timed business decisions and investments, but we addressed those mistakes and got ourselves back to a strong equity position with a Tier I capital ratio of 11 percent. We also had financeable collateral and solidly performing businesses. There is nothing about this profile that would indicate a bankrupt company. “
Right Dick, no apology needed.
Fuld was one of many Wall Street leaders who failed to step up and say what any stand-up guy would say “Guys, I messed up. I’m sorry.” And for every mistake they made, they’d spend the rest of their time and alleged financial experience and brilliance to help clean it up. But why bother when it’s much easier to deny and blame someone or something else?
In Corzine’s case, an offer to help probably wouldn’t amount to much anyhow. Here is a guy who didn’t understand from day one what the futures brokerage model was about. But instead of getting all lawyered up and paying a substantial sum to his defense attorney, perhaps Corzine would take the advice of the guy on the elevator and pony up whatever he had, whatever he could to pay the customers what they were owed. That’s George Bailey-esque character, however, the likes of which Wall Street leaders don’t show when the going gets tough.
So the challenge falls on the futures industry to collectively regain the trust of its customers again with courage and conviction and take the challenge of rebuilding head on.
I’ve advocated a Blue Ribbon panel to assist in that effort. That is just one step in what may be a long journey.