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Morning Coffee: You may not want a side hustle while you work for Citadel Securities. The new big hirer in New York is the most controversial

As Gore Vidal once said, “whenever I see a friend succeed, a little something in me dies”.  It’s a sentiment not wholly unknown in the banking industry, particularly when high-rolling traders set out on their own.  While their former colleagues suffer with mere jealousy, their former employers have an even more direct reason to feel uncharitable – all the money they’re making for themselves, they could still be making for the firm.

Most of the time, the negative emotions just pass over and everyone learns to live with the little death.  Occasionally, however, when the former employer feels particularly badly treated, things end up in courtCitadel Securities is currently suing crypto market maker Portofino Technologies, claiming that its founders put the whole thing together while working for Citadel’s London office, and (among other claims) that they stole trade secrets and used proprietary information. 

Citadel claims in a court filing that an internal investigation found emails and pitch decks showing that Leonard Lancia and Alex Cassino were raising capital while still working at Citadel and that they “engaged in a brazen scheme to steal Citadel Securities’ trade secrets, lie to their Citadel Securities colleagues and raid the ranks of Citadel Securities’ employees”.  Portofino, for its part, says that “This claim is the latest step in a campaign by Citadel to seek to prevent Portofino from going about its legitimate business … It is unmeritorious, anticompetitive and a classic example of corporate bullying”.  Despite the colourful language, cases like these tend to turn on quite technical points of fact and law, about which we are really very content not to have an opinion.

The court filing does remind us, however, that contracts of employment in the financial industry tend to be quite grabby when it comes to the dividing line between employee ideas and company intellectual property.  Citadel’s contract (which is by no means atypical) says that “all information, ideas, concepts, improvements, discoveries and inventions . . . , and all other works of a creative, technical or professional nature . . . that are conceived … by me during my employment with Citadel … are the exclusive property of Citadel and shall be owned by Citadel”.  This specifically includes “any work product that is developed entirely on the employee’s own time”.

Don’t worry, your screenplay about time travelling cats is safe; this clause only applies to things which “relate in any way to Citadel’s current, proposed or planned research, developments, operations, business, strategies, products or services”.  And that’s pretty typical for the industry.  But where might the boundaries of “relate in any way” be drawn?  What if you were writing a screenplay for a prestige drama about investment bankers?  If your yoga influencer channel was running content about work-life balance? Or perhaps less fancifully, what if your participation in a fun game about monkeys turned into a lucrative niche in NFT trading?

The basic answer in all of these cases is “it depends how much your boss wants to spend on lawyers”.  Most of the time, side hustles and projects are tolerated, if for no other reason than that managers usually have better things to do with their time than spend every minute in an employment court.  Sometimes, however, they get mad and decide to make an example out of someone.  If you’re worried, it might be best to check beforehand and save trouble later.

Elsewhere, the government of Saudi Arabia isn’t just hiring bankers in Saudi Arabia.  The Public Investment Fund is also opening up international offices to manage its assets, including one in New York with a target size of 50 employees.  Since beginning last year, it’s taken staff from Point72, Goldman Sachs and Baillie Gifford, among others.

This might be considered a way to enjoy the salary and employment stability of the Saudi sovereign wealth fund without quite so much in the way of heat, sand and lifestyle restrictions.  But it’s likely to come with a degree of social stigma.  There’s a genuine ethical dilemma among asset managers about accepting mandates from authoritarian regimes; at the very least, anyone working at the PIF in New York is going to have to develop a thick skin when it comes to jokes about the consequences for investment underperformance.

Meanwhile …

BigTech companies are laying off staff, and many of them have never been so unpopular, but that doesn’t mean that their employees have stopped being snobby about banking, apparently.  Recruiters are saying that coders from Google, Meta and Microsoft don’t think they’ll find interesting work outside the tech industry – they can be enticed onto AI projects or similar glam jobs, but they’re not interested in the nuts and bolts of finance IT. (WSJ)

JPMorgan’s EU operations have tripled their headcount since 2021 and now have more than 4,000 employees.  (Financial News)

A lot of the increase in EU banking jobs is accounted for by Paris trading floors, and Barclays is growing fast in the City of Light too; it’s leased a bigger building and plans to grow from 300 to 500 staff over the next two years.  (Bloomberg)

Rajeev Misra continues to be a true believer in WeWork; after backing Adam Neumann with SoftBank’s Vision Fund, he’s now made a $500m high-yield debt investment for his own newly launched fund, One Investment Management.  Perhaps he sees something everyone else doesn’t? (WSJ)

According to Elon Musk, working from home is “not just a productivity thing, I think it’s morally wrong”.  It’s “an affront” to people who can’t do their job remotely, apparently; in many ways this might be closer to the emotional truth of how management feel than any euphemistic memos about “teaching moments” and “energy”. (Bloomberg)

Don’t skip the introduction, and beware of authors who bulk out a thin idea to make it look more impressive.  Tips for reading business books without feeling like you should have spent the flight watching “Guardians of the Galaxy”. (Harvard Business Review)

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AUTHORDaniel Davies Insider Comment

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