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COMMENT: We must wonder if the late Roberto Calvi was setting a precedent when he allegedly committed suicide in London. (He was later determined to have been murdered, to the surprise of no one.)
One of the surreal, almost hallucinatory financial instruments that were at the center of the 2008 financial collapse were CDO’s–collateralized debt obligations.
Both JP Morgan Chase and Deutsche Bank are, or have been the focal points of ongoing investigations into their operations.
Now, two execs, one former and one active, have allegedly committed suicide. The mortality rate among London based banking executives has been particularly high in recent years.
We wonder if the high mortality rate, the ongoing capital troubles and legal investigations plaguing the firms may be related to these deaths.
Both JP Morgan Chase and Deutsche Bank are primary focal points of the Forex fraud investigation.
Are we looking at collateralized “death” obligations?
- “Pterrafractyl” informs us that another banker , connected to Russell Investments, has died under strange circumstances.
- Another “Pterrafractyl” update notes a missing Wall Street Journal  reporter and another Deutsche Bank-linked executive who bought the farm.
- A mysterious, lethal fire in Argentina destroyed important banking records  at a point in time in which Argentina’s foreign currency reserves were being questioned.
EXCERPT: William Broeksmit, a former senior manager at Deutsche Bank with close ties to co-Chief Executive Anshu Jain, has been found dead at his home in London in what appears to have been a suicide.
Jain and the bank’s other co-CEO Juergen Fitschen announced Broeksmit’s death in an internal mail to Deutsche Bank employees.
When asked about the death, London’s Metropolitan Police issued a statement saying a 58-year-old man had been found hanging at a house in South Kensington on Sunday afternoon and been pronounced dead at the scene. Police declared the death non-suspicious.
Broeksmit, a U.S. national, was an instrumental founder of Deutsche’s investment bank and one many bankers, including Jain, who joined Germany’s flagship lender from Merrill Lynch in the 1990s, when Deutsche launched plans to compete on Wall Street.
Broeksmit was also a principal actor in Deutsche’s efforts to unwind its riskier positions and to reduce the size of its balance sheet in the wake of the global financial crisis.
His death comes at an uncomfortable juncture for Jain and Fitschen, whose reign has been dogged by poor results and legal troubles since they took over from Josef Ackermann in 2012.
The two CEOs are expected to defend their reform record at the bank’s annual news conference on Wednesday. Last week, they revealed that litigation and restructuring costs had pushed Deutsche to a surprise loss in the fourth quarter of 2013.
Broeksmit, who worked as head of risk and capital optimisation, was viewed as one of Jain’s closest allies and a key player in the bank’s attempts to recover following the financial crisis.
Jain sought to have Broeksmit join the management board as head of risk management in 2012. But in a major setback for both men, German regulator Bafin blocked the appointment, saying Broeksmit lacked experience leading large teams.
Bafin was not immediately available for comment. The Bundesbank, which also oversees Deutsche, declined to comment.
Broeksmit worked alongside Jain at Merrill Lynch before joining Deutsche in 1996 as part of group of roughly 100 bankers who, alongside Edson Mitchell, formed the core of Deutsche’s new investment banking business.
Mitchell, one the bank’s most powerful executives, died in a plane crash in 2000.
EXCERPT: A JP Morgan tech executive fell to his death from the U.S. bank’s 33-storey tower in London’s Canary Wharf financial district on Tuesday in what British police said was a “non-suspicious” incident.
Police were called to the glass skyscraper at 8:02 GMT, where a 39-year-old man was pronounced dead at the scene after hitting a lower 9th-floor roof. Witnesses said the body remained on the roof for several hours.
London police said no arrests had been made and the incident was being treated as non-suspicious at this early stage.
A source familiar with the matter confirmed the deceased was Gabriel Magee, a vice president with the JP Morgan’s corporate and investment bank technology arm, who had been an employee since 2004. . . .
. . . . Though the details of Tuesday’s incident are still unclear, occasional suicides by people working in London’s big banks have provoked criticism of the demands placed on some financial services workers.
A Bank of America exchange manager jumped in front of a train and another man jumped from a seventh-floor restaurant, both in 2012. A German-born intern at Bank of America died of epilepsy last year in London. . . .
Mike Dueker, the chief economist at Russell Investments, was found dead at the side of a highway that leads to the Tacoma Narrows Bridge in Washington state, according to the Pierce County Sheriff’s Department. He was 50.
He may have jumped over a 4-foot (1.2-meter) fence before falling down a 40– to 50-foot embankment, Pierce County Detective Ed Troyer said yesterday. He said the death appeared to be a suicide.
Dueker was reported missing on Jan. 29, and a group of friends had been searching for him along with law enforcement. Troyer said the economist was having problems at work, without elaborating. Dueker was in good standing at Russell, said Jennifer Tice, a company spokeswoman. She declined to comment on Troyer’s statement about Dueker’s work issues.
“We were deeply saddened to learn today of the death,” Tice said in an e-mail yesterday. “He made valuable contributions that helped our clients and many of his fellow associates.”
Dueker worked at Seattle-based Russell for five years, and developed a business-cycle index that forecast economic performance. He was previously an assistant vice president and research economist at the Federal Reserve Bank of St. Louis.
He published dozens of research papers over the past two decades, many on monetary policy, according to the St. Louis Fed’s website, which ranks him among the top 5 percent of economists by number of works published. His most-cited work was a 1997 paper titled “Strengthening the case for the yield curve as a predictor of U.S. recessions,” published by the reserve bank while he was a researcher there.
Dueker worked at the reserve bank from 1991 to 2008, starting as an entry level research economist, then advancing to senior economist, research officer, and assistant vice president, according to Laura Girresch, a spokeswoman.
He helped the bank’s president prepare for Federal Open Market Committee policy meetings and wrote and edited for economic publications, she said. Dueker served as editor of the reserve bank’s research publication, Monetary Trends, and also was an associate editor of the Journal of Business and Economic Statistics, Girresch said.
“He was a valued colleague of mine during my entire tenure at the St. Louis Fed,” said William Poole, who was president of the reserve bank from 1998 to 2008. “Everyone respected his professional skills and good sense.” . . . .
In a span of four days last week, two current executives and one recently retired top ranking executive of major financial firms were found dead. Both media and police have been quick to label the deaths as likely suicides. Missing from the reports is the salient fact that all three of the financial firms the executives worked for are under investigation for potentially serious financial fraud.
The deaths began on Sunday, January 26. London police reported that William Broeksmit, a top executive at Deutsche Bank who had retired in 2013, had been found hanged in his home in the South Kensington section of London. The day after Broeksmit was pronounced dead, Eric Ben-Artzi, a former risk analyst turned whistleblower at Deutsche Bank, was scheduled to speak at Auburn University in Alabama on his allegations that Deutsche had hid $12 billion in losses during the financial crisis with the knowledge of senior executives. Two other whistleblowers have brought similar charges against Deutsche Bank.
Deutsche Bank is also under investigation by global regulators for potentially rigging the foreign exchange markets – an action similar to the charges it settled in 2013 over its traders’ involvement in the rigging of the interest rate benchmark, Libor.
Just two days after Broeksmit’s death, on Tuesday, January 28, a 39-year old American, Gabriel Magee, a Vice President at JPMorgan in London, plunged to his death from the roof of the 33-story European headquarters of JPMorgan in Canary Wharf. According to Magee’s LinkedIn profile, he was involved in “Technical architecture oversight for planning, development, and operation of systems for fixed income securities and interest rate derivatives.”
Magee’s parents, Bill and Nell Magee, are not buying the official story according to press reports and are planning to travel from the United States to London to get at the truth. One of their key issues, which should also trouble the police, is how an employee obtains access to the rooftop of one of the mostly highly secure buildings in London.
Nell Magee was quoted in the London Evening Standard saying her son was “a happy person who was happy with his life.” His friends are equally mystified, stating he was in a happy, long-term relationship with a girlfriend.
JPMorgan is under the same global investigation for potential involvement in rigging foreign exchange rates as is Deutsche Bank. The firm is also said to be under an investigation by the U.S. Senate’s Permanent Subcommittee on Investigations for its involvement in potential misconduct in physical commodities markets in the U.S. and London.
One day after Magee’s death, on Wednesday, January 29, 2014, 50-year old Michael (Mike) Dueker, the Chief Economist at Russell Investments, is said to have died from a 50-foot fall from a highway ramp down an embankment in Washington state. Again, suicide is being presented by media as the likely cause. (Do people holding Ph.D.s really attempt suicide by jumping 50 feet?)
According to a report in the New York Times in November of last year, Russell Investments was one of a number of firms that received subpoenas from New York State regulators who are probing the potential for pay-to-play schemes involving pension funds based in New York. No allegations of wrongdoing have been made against Russell Investments in the matter.
The case of David Bird, the oil markets reporter who had worked at the Wall Street Journal for 20 years and vanished without a trace on the afternoon of January 11, has this in common with the other three tragedies: his work involves a commodities market – oil – which is under investigation by the U.S. Senate’s Permanent Subcommittee on Investigations  for possible manipulation. The FBI is involved in the Bird investigation.
Bird left his Long Hill, New Jersey home on that Saturday , telling his wife he was going for a walk. An intentional disappearance is incompatible with the fact that he left the house wearing a bright red jacket and without his life-sustaining medicine he was required to take daily as a result of a liver transplant. Despite a continuous search since his disappearance by hundreds of volunteers, local law enforcement and the FBI, Bird has not been located.
When a series of tragic events involving one industry occur within an 18-day timeframe, the statistical probability of these events being random is remote. According to a number of media reports, JPMorgan is conducting an internal investigation of the death of Gabriel Magee. Given that JPMorgan, Deutsche Bank and Russell Investments are subjects themselves of investigations, a more serious, independent look at these deaths is called for.
While we are sure it is a very sad coincidence, on the day when Argentina decrees limits on the FX positions banks can hold and the Argentine Central Bank’s reserves accounting is questioned publically, a massive fire – killing 9 people – has destroyed a warehouse archiving banking system documents. As The Washington Post reports, the fire at the Iron Mountain warehouse (which purportedly had multiple protections against fire, including advanced systems that can detect and quench flames without damaging important documents) took hours to control and the sprawling building appeared to be ruined. The cause of the fire wasn’t immediately clear – though we suggest smelling Fernandez’ hands…
We noted yesterday that there are major questions over Argentina’s reserve honesty…
While first print is preliminary and subject to revision, the size of recent discrepancies have no precedent. This suggest that the government may be attempting to manage expectations by temporarily fudging the “estimate ” of reserve numbers (first print) while not compromising “actual” final reported numbers. If this is so, it is a dangerous game to play and one likely to back-fire.
During a balance of payments crisis – as Argentina is undergoing – such manipulation of official statistics (and one so critical for market sentiment) is detrimental to the needed confidence building around the transition in the FX regime.
And today the government decrees limits on FX holdings for the banks…
Argentina’s central bank published resolution late yesterday on website limiting fx position for banks to 30% of assets.
Banks will have to limit fx futures contracts to 10% of assets: resolution
Banks must comply with resolution by April 30
And then this happens…
Nine first-responders were killed, seven others injured and two were missing as they battled a fire of unknown origin that destroyed an archive of bank documents in Argentina’s capital on Wednesday.
The fire at the Iron Mountain warehouse took hours to control…
The destroyed archives included documents stored for Argentina’s banking industry, said Buenos Aires security minister Guillermo Montenegro.
The cause of the fire wasn’t immediately clear.
Boston-based Iron Mountain manages, stores and protects information for more than 156,000 companies and organizations in 36 countries. Its Argentina subsidiary advertises that its facilities have multiple protections against fire, including advanced systems that can detect and quench flames without damaging important documents. . . .
“There are cameras in the area, and these videos will be added to the judicial investigation, to clear up the motive of the fire and collapse,” Montenegro told the Diarios y Noticias agency.