Back in 1995, Proctor and Gamble (PG) won a lawsuit against Bankers Trust (BT). Business Week has some snippets of BT employees talking about BT's SOP.
THE BANKERS TRUST TAPES
In just-released court papers, Procter & Gamble lays out racketeering charges against Bankers Trust. The key evidence: Some 6,500 tape recordings
It's Nov. 2, 1993, and two employees of Bankers Trust Co. are discussing a leveraged derivative deal the bank had recently sold to Procter & Gamble Co. ``They would never know. They would never be able to know how much money was taken out of that,'' says one employee, referring to the huge profits the bank stood to make on the transaction. ``Never, no way, no way,'' replies her colleague. ``That's the beauty of Bankers Trust.''
An internal document about a proposed derivative for Federal Paper Board allegedly says that Bankers would make $1.6 million on the deal, including a ``7 [basis point] rip-off factor.''
In a different instance, two Bankers employees are discussing a client's loss on a trade. One then tells the other: ``Pad the number a little bit.'' P&G quotes another Bankers Trust employee saying to a colleague: ``Funny business, you know? Lure people into that calm and then just totally f--- 'em.''
It quotes one banker describing a client's portfolio as being in total disarray: ``If this ever comes out in the press, it is the most insane mess of trading I've ever, ever seen...they just kept trying to trade them out of losses...Everything they put in [the client's account] lost.''
The second employee quoted above says P&G undertook an option trade as part of a derivatives contract, and Bankers paid P&G only half what that option was worth. The employee allegedly remarks: ``This could be a massive huge future gravy train.'' He also allegedly discussed how significant one of P&G's contracts had been for Bankers, saying, ``This is a wet dream.''
According to P&G's documents, one Bankers salesman, discussing P&G's agreement to enter into the Nov. 2 contract, said ``we set 'em up.''
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