The saga of US futures broker Refco and its British-born former chief
executive, Philip Bennett, had that sense of déjà vu about it. Frozen assets. A
run on the bank. Irresistible stuff.
Lock ’em up, I say - that is, the US regulators who drafted all those
Byzantine rules. Without commenting on Refco, in particular, it is blindingly
obvious that things will go awry at companies from time to time. No amount of
red tape will prevent it. But try telling that to vote-hungry US politicians.
They have their own agenda.
Purely for entertainment value, I often hark back to the case of Joseph Jett,
the Wall Street bond trader with a name like a B-list actor. He was the hotshot
at Kidder Peabody who went from hero to zero in 1994 in a rather public fashion.
Jett even managed to ensnare the great Jack Welch of General Electric, a man
who is not easily stitched up. GE owned Kidder at the time, a diversification
that Welch never felt entirely comfortable with. He recalls in his memoirs being
physically sick upon learning that one of those sharp-suited traders had just
blown a $350m hole in the accounts.
As a black man working on Wall Street, Jett was in a vulnerable position.
First he was feted as a star. Then he was damned as a villain. He always
maintained that he did nothing wrong.
The Securities & Exchange Commission fined him for record-keeping
violations and ordered him to pay back $8m in profits, but he was cleared of the
more serious fraud charges.
Jett, like Nick Leeson, will always be remembered as the man who broke the
Who said life was fair?
Jon Ashworth is a freelance journalist and writer
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