Traders Caught Up in Wall Street Probes Switch to Shadow Banking
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At less regulated firms, ‘scarlet letter’ matters less
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Fintech startups, small brokerages among beneficiaries
Some mortgage bond traders tangled up in investigations are moving into the shadow banking system, where their new employers have greater latitude to hire people with blemishes on their records.
More than 20 traders at big banks left their jobs, or were pushed out, amid a wave of U.S. government and internal bank probes into misconduct in the trading and pricing of mortgage bonds and other complex debt in recent years, according to a Bloomberg review of employment records. Many of those professionals caught in the dragnet since 2013 are finding their records tarnished even if they were never charged or left voluntarily. At least 10 have ended up at online lenders, privately held brokerages, and other less-regulated firms, interviews and documents show…
Traders Caught Up in Wall Street Probes Switch to Shadow Banking
