Muzzled: From T-Ball to Terrorism--True Stories That Should Be Fiction

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Muzzled

NELSON CURRENT

Chapter One

I seem to be on everyone's e-mail list. No matter how hard I try to keep my own e-mail address obscure, I get a boatload of messages every day, not only from people I know, but also from total strangers. I'm not talking about those who communicate via my Web site (www.mastalk.com), which I set up to give my radio listeners and Daily News readers an avenue to reach me. I mean that I receive e-mail via an address which I attempt to keep secret. I'll bet it's happened to you, too.

Inevitably, people whom you want to have your e-mail address see something interesting they wish to circulate to a number of their friends or business associates. So they send it to you as one of a handful of individuals on their receipt list, and all of a sudden, individuals who are not connected, except by virtue of having one friend or acquaintance in common, see one another's e-mail address. It's the Internet version of the sixth degree of separation, except cyberspace puts us all at one degree of separation.

One positive thing about having my e-mail address exposed: it increases the joke flow. Take any serious news event or matter of less importance but still of public concern: the space shuttle, OJ, Clinton/Lewinsky, any presidential race, or Michael Jackson. Within minutes of serious reportage of such a happening, I receive someone's comedic interpretation of the item. (Thankfully, 9/11 was an exception.)

I've noticed, more often than not, when I scroll to the bottom of the e-mail message following the cyber trail to where it originated, I can decipher an e-mail address with some financial institution connection. It could be an investment-banking house or a stock brokerage. Try it. Next time something comes around, see if you can't do likewise.

Forget the Borscht Belt. Wall Street must be the funniest place on earth. My Internet experience tells me that the most rapidly crafted and most creative jokes seem to flow from that vicinity. I'm not saying the best jokes are written there. But those who work in the financial sector seem to get them first. And they share. I think I can further explain the phenomena.

Information is the lifeblood of Wall Street. Everything they do there is based on having good knowledge. The home to Masters of the Universe has a disproportionate share of Type-A personalities whose livelihood is dependent upon their staying a few steps ahead on matters of financial concern. Those market-related matters are tied to current events. So the movers and shakers on Wall Street make it their business to know what's going on all over the world, and that is why they have such keen insight and the best first impressions into world events.

The high-pressure environment in which they work is also an atmosphere that spawns some levity to prime the intellectual pump. (There've been a few recent incidents that have gotten out of control and portrayed a pinstriped frat house.) You put it all together and you have bright guys, in the loop, sharing a few laughs as they go about their work. I think it's a good thing.

But now I'm worried that this, like many other institutions of American life dealt with in these pages, is imperiled. And my cause for alarm is the case of Andrew Susser and Joel Krasner.

I've never met Andrew Susser, and the only picture I have seen of him is the one that got him fired. More about that in a moment. But from what I have read about him and gleaned from some who are close to him, this guy sounds like a real-life Sherman McCoy. The book version, not the way Tom Hanks played the Tom Wolfe-created visage of Wall Street.

Consider his bio. Susser graduated from prestigious Vassar College in 1986 with a BA in Economics. Maybe an indication of his independent thinking and willingness to challenge conventional norms was in evidence when he co-founded and was editor of the Vassar Spectator, an "alternative" campus newspaper.

After graduating from Vassar, Andrew Susser left Poughkeepsie and headed for Wall Street where he spent two years as a market analyst and institutional trading liaison at Merrill Lynch. After that, it was on to Philadelphia where he studied at the University of Pennsylvania. He was awarded two degrees: an MBA from Wharton and a JD from (my alma mater) Penn Law School. After Penn, he had a brief stint at the law firm of Shearman & Sterling, concentrating in the areas of corporate finance and mergers and acquisitions.

But Susser quickly grew tired of putting other people's deals together and decided to get in on the action himself. He landed at Moody's Investors Service where he cut his teeth in the Gaming and Theater sectors as a senior analyst. Andrew Susser then spent two years as a fixed-income Gaming and Lodging analyst at Salomon Brothers and finally landed at Banc of America Securities, LLC, an investment banking unit of Charlotte-based Bank of America Corp. which "delivers capital raising, financial advisory and risk management solutions, bulge-bracket trading and global distribution services, and objective research on global markets and growth sectors to corporations, institutional investors, financial institutions and government entities."

It was here that Susser thrived.

After just five and a half years at Banc of America Securities, Susser was the managing director and head of high-yield bond research, as well as the high-yield analyst for the Gaming, Lodging, and Leisure sectors. From 1999 to 2004, he was a member of the Institutional Investor Fixed Income Analyst All-Star Team, and from 2002 through 2004, he was the No. 1 ranked analyst in the Gaming and Lodging sectors.

During his career, he has been the lead research analyst on many high-yield financings, including those for MGM Mirage, Mandalay Resort Group, Caesar's Entertainment, Station Casinos, Boyd Gaming, Mohegan Tribal Gaming Authority, Aztar Corporation, Stater Bros. Supermarkets, Speedway Motorsports, Vail Resorts, Gaylord Entertainment, and Host Marriott.

By 2004, the not-yet-forty-year-old Susser was enjoying phenomenal success-the kind of achievement that was noted by his peers and the media. Susser had become the sort of guy to whom financial writers at outlets such as Bloomberg News, the New York Daily News, or even the Philadelphia Inquirer might turn to for analysis of the Gaming and Lodging industry.

So far, so good. New York boy done well. Young family. Big income. Recognition by his peers. Unfortunately, it all came temporarily crashing down for Susser at the start of 2005 when he was suddenly fired from his job and forced to forego his reported $4.4 million position.

Andrew Susser was fired because he distributed a report entitled "Checking In" to clients in his area of expertise which featured a cover photograph of a man carrying a woman in high heels across a hotel room threshold. Susser's face had been superimposed over the face of the woman, so it appeared he was the female being carried into the hotel room. That's it. She is clothed. There is absolutely no nudity. And not a word of profanity. The bottom of her skirt is covering her knees. And that is all that is seen in the photograph. Take a look at the picture. (It's at the beginning of this chapter.) Tell me, what is so offensive?

The report was initially distributed in December of 2004 to the immediate high-yield community where it garnered a grand total of zero complaints about the cover photo. As a matter of fact, the report was out for a few weeks before there was any reaction. The general consensus among recipients was as Susser intended-it was compellingly funny! The report was then distributed to Banc of America Securities' clients around the United States and, thereafter, alas, some unknown person-perhaps not even an intended recipient-raised a beef and touched off a politically correct chain reaction.

When the execs at Banc of America Securities caught wind of the research report, they promptly forced Susser and Joel Krasner, the head of fixed-income research publishing, to "check out." Krasner, who had been hired less than a year before, in March of 2004, was dumfounded. "I had been hired in the Fixed-Income Research Publishing Department to put in place policies and procedures for compliance for research coming into that area. These changes were already made in the equity area, so now it was time for fixed-income research to become more compliant. For ten months, I created manuals, policies, and worked closely with the legal and compliance departments. It was quite a productive ten months," Krasner later told me.

Krasner is a well-known and respected securities analyst with three decades under his belt on Wall Street. His record was clean, his professional credentials intact. Before joining Banc of America, he'd worked in a similar supervisor-analyst capacity for Deutsche Bank. Earlier in his career, he'd spent twenty-five years working, like Susser, as a securities analyst at such Wall Street bastions as Dean Witter and Lehman Brothers.

Krasner has a master's degree in finance and investments, is a Chartered Financial Analyst, has authored books and articles on finance and investments, taught college economics and finance courses, and has instructed CFA candidates at a professorial level. Suddenly, none of that mattered.

Krasner and others have pieced together for me the events that gave rise to his firing and that of Andrew Susser. Krasner said David Goldman then ran the Banc of America Fixed-Income Research Department. Within that department, Goldman managed fixed-income securities analysts (like Susser). Goldman also oversaw Krasner in his role as the person responsible for fixed-income research publishing.

So, when Susser would put together a report, it was then sent to Krasner's department where editors would edit the text, desktop publishers would arrange text and graphics and add a cover, and, finally, supervisory analysts (like Krasner) would be charged with the responsibility to read and make certain it was compliant. So how did this cover get on Susser's report?

In December, Susser's report came into Krasner's department. An editor and a supervisory analyst read it. Because the report dealt with the hospitality industry, the cover that was generated featured a man carrying a woman over the threshold of a hotel room.

Soon thereafter, the publishing department at Banc of America held a holiday party, where the cover photo underwent a slight modification. "At the party there was a conversation about some of the substantive issues in the report. In the midst of that discussion, somebody superimposed [Susser's] face over the woman's face, and everybody chuckled. It was no big deal. That was the total extent of it." Not giving the matter much thought, Susser consented for the new cover to be used.

Initially, the report was met with silence at Banc of America. Then, there was a bit of a buzz when word began to circulate about the infamous cover. The buzz was created by laughter. The consensus, according to those with whom I have spoken, was that the individuals who saw the report with Susser on the cover got a kick out of his face on the woman's clothed body. It was different, and it was head-turning, which was the intended effect.

This, however, did not sit well somewhere up the food chain at Banc of America nor, apparently, with David Goldman, the head of fixed-income research. As one coworker told me, Goldman established a mantra that he was going "to do what was necessary to save his own job." Well, he did. He wanted to show his supervisors that he had it under control, so he fired Susser and Krasner.

Missing was any mention of any complaint by any client.

"Nobody ever complained to me," said Krasner. Krasner himself never knew the mocked cover had been used until a few weeks after its publication.

The decision was final. Stunned, the two asked independently if they had broken any regulations. No, was the answer. Nor had they traded on inside information. There was no question about the misuse of client resources. In other words, there was not a whiff of financial impropriety to what they had done, and neither man had any hint of scandal in his work-related past. Nevertheless, each man turned in his Blackberry and laptop, and headed home.

To be certain, they were not offered the opportunity to resign. They were fired. Andrew Susser, a thirty-nine-year-old wunderkind of Wall Street, responsible for significant revenues to his firm, was fired from Banc of America Securities where the powers-that-be were hell-bent on maintaining some killjoy image in the name of political correctness. Ditto for the older, equally respected Joel Krasner.

"Andrew Susser is no longer employed by the company," was all Banc of America Securities spokesman Jeff Hershberger would say at the time, declining to comment on the reasons.

Now that you've heard the story, you are no doubt wondering which feminist group organized, marched, and boycotted Banc of America Securities. What trans-gender association took out an ad in the Village Voice to express utter umbrage with Susser dressed like a woman? What, exactly, was the hook that Jesse Jackson used to get himself into the controversy? Surprisingly, none of the above.

Someone close to the controversy told me that there was not a hint of objection from any of Susser's clients outside the firm, nor from anyone on the inside of Banc of America Securities. The worst transgression here was that neither man was given even a small hint of his impending termination.

Industry sources say Susser's bosses should not have been surprised. Susser was known as a young man willing to think and act outside the box. That was what made him successful. His reports were eagerly awaited on Wall Street because of his excellent analytic ability and presentation. "His irreverent sense of humor was always welcome," Barbara Cappaert, Gaming and Lodging analyst at research firm KDP Investment Advisors, reportedly said. "He's a great analyst and I really looked forward to his report every month." (Read that again. Her name is Barbara. She has the right attitude.)

In the politically correct New Millennium, Susser, a man whose research reports "were known for their comic covers," found himself fired. Bloomberg reported that clients of the securities firm were similarly shocked. "It's a big loss," Bloomberg reporter Tom Parker, high-yield portfolio manager for Barclays Global Investors, said. "He's definitely one of the top Gaming analysts."

There is some good news. This is a story with a happy ending. The hysteria exhibited by Banc of America Securities was not shared on Wall Street where people in the know were startled by Susser and Krasner's termination. Typical were the published comments of Frank Barkocy, director of research at Keefe Managers, who the New York Daily News reported as saying, "We're getting all too sensitive in this day and age. People take umbrage at the damnedest things." Or Tim Chriskey, the chief investment officer at Solaris Asset Management, who spoke in support of Susser when he said, "I can't believe he would have meant anything malicious. He was trying to be cute and create some attention. Unfortunately, he created so much attention, it got him fired." Then there was Michael Holland, the founder of Holland & Co., who said, "There had to be something more to this story than simply one choice that was not acceptable to the bank's management. It'd be unfortunate if Wall Street has completely lost its sense of humor."

Marjorie Kelly, editor of Business Ethics magazine, sees an emerging trend on Wall Street toward zero tolerance: "There is a new kind of Puritanism which has replaced an era of arrogance and ignorance, an attitude that boys will be boys." Ira Lee Sorkin, a senior white-collar crime lawyer at Carter Ledyard & Milburn in Manhattan, summed up the situation as follows: "We are in a regulatory frenzy. Corporations are acting out of fear, and they don't want to take a chance that employees did something wrong under their watch, so they are basically cleaning house. Someone has to say, 'Enough!'"

(Continues...)

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Excerpted from Muzzled by MICHAEL SMERCONISH Copyright © 2007 by Michael Smerconish. Excerpted by permission.
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