Christian Bittar, an ex-senior proprietary trader at Deutsche Bank who was implicated in the Libor scandal and left Deutsche in 2011, is said by Bloomberg to have foregone €40m ($53m) in bonuses.
In a statement, Deutsche said the bonuses that were clawed back were ‘unvested compensation,’ the implication being that they were deferred from the years prior to 2011. Most banks had three year deferred bonuses at this time, implying that Bittar’s deferrals dated back to 2008. Under a standard three year deferral programme, a 66% of deferred 2008 bonuses would have already vested and therefore been unavailable for claw back, suggesting the original bonuses may have been considerably larger. Deutsche declined to comment.
One source close to the matter told us Bittar received a bonus of around $50m for a single year between 2008 and 2010 and that his audited profits totaled €1.7bn over the five year period before he left the bank, while those of his desk totalled €3bn. Jason Kennedy at search firm Kennedy Associates says prop traders at banks are typically paid 12-15% of their profits, suggesting Bittar’s total bonuses over five years could have been as high as €255m ($342m). However, another headhunter who declined to be named suggested a 5% cut of the profits would have been more realistic, putting Bittar’s earnings in the region of €85m ($120m).
Deutsche didn’t comment on the alleged level of Bittar’s profits or his pay. However, it said that the trading strategy employed by Bittar was, “based on a legitimate view of the market that diversified and lowered the bank’s portfolio risk during the financial crisis,” and that it had found “no link” between the “inappropriate conduct of a limited number of employees” and the profits generated by Bittar’s trades. The implication is that Bittar’s profits were entirely unrelated to the manipulation of Libor.
Tom Hayes, the trader implicated in UBS’s Libor investigation reportedly made $260m in revenues for the bank over a three year period.
Bittar may feel aggrieved at the loss of €40m in deferred bonuses, particularly as he was also dismissed by the bank in December 2011, thereby making it unnecessary for the bank to pay him a bonus for that year. Sources say he was put on sabbatical before he was dismissed. Bittar currently works for hedge fund BlueCrest in Switzerland and did not respond to a request for comment.
As we’ve noted before, the ongoing Libor investigation at Deutsche Bank has the potential to damage Anshu Jain. “Jain is being weakened by the Libor investigation,” analyst Andreas Plaisier at Warburg Research in Frankfurt, told us: “If he is seen as being responsible for any Libor fixing it could make it very hard for him.
Simon Adamson, an analyst at CreditSights, said Jain is likely to be unaffected, however. “I would be surprised if there were real operational links between people involved in Libor fixing and senior management. Any misconduct at Deutshce Bank will reflect upon those working in the Libor setting operaton, rather than Anshu Jain.”
In separate news, Rich Ricci, currently head of Barclays Investment Bank, is one of 25 names to appear on a newly released shortlist of individuals implicated by regulators in Barclays’ manipulation of Libor.