Vervet Monkey, Banker and Stupid mistake.

R. Gopalakrishnan is executive director with Tata Sons. In his book “Bonsai Manager” talks about how otherwise very intelligent managers make stupid mistakes. He gives example of Vervet monkey, which is very intelligent monkey, but somehow makes stupid mistake of climbing a tree with carcass of antelope. In its curiosity to inspect carcass, it forgets that its predatory , a leopard is also there. Leopards being cunning hunters rarely miss opportunity to hunt these monkeys.

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James McDermott was CEO of investment bank Keefe, Bruyette & Woods. James was married with two children and drawing salary of $ 4 million a year. In 1999, KBW was planning to go public and was expected to raise around $ 85 million, of which McDermott’s stake would have been $ 16 million. But public issue had to be scrapped, because James McDermott was arrested on charges of insider trading.

James McDermott was having affair with porno movie actress Kathryn B. Gannon. He told her about some mergers that were going to take place in banking industry, which his investment bank was handling. Kathryn along with her other boyfriend Anthony P. Pomponio opened a trading accounts and brought shares of banks that were involved in merger. Post-merger they sold shares and each of them made profit of around $ 80,000/-.

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James had nothing to do with these deals and did not make any money in these transactions. But his stupidity of sharing confidential information with his girlfriend cost him his job and career.

insider trading

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