"A Hardworking Dad" is Dead Because of Corporate Greed

On Friday April 5th, I gave U.S. Marshals a standing ovation in my living room as they escorted Credit Suisse's former senior trader Kareem Serageldin from London to New York to face his long overdue hearing before a US Magistrate Judge.

As the $1.5 million bail was posted, I said a prayer and remembered my former industry colleague who took his own life 4 years ago. This blog post is for him.  

Mr. Serageldin who had been head of the financial structured products group and two of his colleagues David Higgs and Salmaan Siddiqui - who have already pleaded guilty and are cooperating with authorities - were indicted for allegedly covering up losses in a $3.5 billion toxic mortgage portfolio during the housing market collapse in 2007. 

Prosecutors claim they falsely and intentionally inflated the value of the mortgage securities to boost their personal bonuses - the same way others cooked the books inside all the companies responsible for the mortgage subprime/CDO market meltdown. 

Most observers remain focused on the fact that this particular scandal forced a Credit Suisse write-down of $2.65 billion.  Not me. 

I'm laser-focused on countless corporate citizens whose lives, careers and dreams were destroyed. These white collar criminals colluded with others across an entire industry to execute hundreds of millions of transactions designed to bolster their paychecks while harming families and investors across the globe. 

Who could believe that Mr. Serageldin's all-in compensation package at Credit Suisse of $7 million a year was simply not enough for him to live on?

I've been recruiting for 25 years and some of the heart breaking and unbelievable stories inside my employment candidate network keep me awake some nights.

Some of these real life stories are worse than others.  Brilliant careers of talented, ethical and hard working people were cut short; and too many of them had 'all' or too much of their near-term financial plans, family dreams, and retirement goals tied exclusively to their employers and their employment status.  Some of them will never recover from these facts. 

It's been six years since 2007 and the unemployment lines are still overflowing with highly credentialed professionals who did not participate in or know anything about the harm that was being done to companies like Lehman Brothers, AIG, Bear Stearns, Credit Suisse, Bank of America, Merrill Lynch, MF Global, etc.  - inside all those familiar places where too many executives and their helpers made decisions to intentionally hide systemic risk and execute the same type of contrived transactions Serageldin, Higgs & Siddiqui willingly created at Credit Suisse. 

The incredible harm to our nation, economy and to so many innocent and unsuspecting people still infuriates me.  What the heck happened to leadership, ethics, transparency, managerial courage and appropriate oversight in Corporate America?

All of us working in these industry corridors could feel the ground shake under our feet in Summer 2007 as the entire economic system braced itself for its ultimate collapse in 2008. 

As a recruitment subject matter expert, I was invited to participate in a editorial board event for Gannett Newspapers led by USA Today in October 2007.  My quote predicting the recession our nation would face made page one.

You see many of us were already in the trenches doing damage and reputation control a whole full year before the world would watch our economy implode in September 2008.  These schemes had gone on undetected through so many bonus seasons that there was no stopping the economic tsunami that was about to hit us hard.   

Before my former colleague and industry peer took his own life inside his Florida home on that December day, he spoke with riveting candor to me about how self-serving men without a conscience inside his company - criminals like Serageldin - had robbed him of his career and ruined his life.  He also mourned the 'consequences' of his own financial decisions during his adult years.  It was all very sad.

As he navigated frustration, disappointment, chaos and fear, he summoned these words,  "My God I went to school nights to get my master's degree. For close to two decades I left my home destined for work in New York City before 6 a.m. never returning until after 8 p.m. - In the early years the kids were already in bed, but I made sure our weekends together were terrific.  How could I be left with nothing to show for all this effort?" 

Like a champion, I can tell you, this man spent no less than 60 hours a week at his office for 18 years helping to build up the companies he supported and believed in.

I know he did these things because I followed his career, helped him with his job searches, talked to his references and led him to job opportunities.  It was a privilege to represent a background like his in any market, so how on earth did he arrive at this awful place?

How did this strong, outgoing, generous, successful finance professional and loving family man end up teetering on this edge? How could he be left staring at his own fragile reflection so overwhelmed and feeling so choked by the smoke and mirrors that destroyed his company? 

"All my money and my family's dreams were tied up in the affluence and success of great firms.  I did it that way because I had every reason to believe that 80 and 100 year old companies would stay in business. How could I have been so wrong?"

"Do you realize what they did?  Senior colleagues - I will never know - purposely created bogus risk-mitigation models that hid the truth behind the toxic subprime mortgage market from everyone; they used their knowledge in structured products to mask losses in their portfolios; they created massive transactions on information technology systems so their toxic mortgages could be bundled, neatly packaged, distributed and traded to unsuspecting investors everywhere; they paid incentives to people willing to eliminate underwriting standards that had protected our industry for decades; they operated through third-party organizations to cover their tracks of deception while laughing at all of us!"

I said nothing and allowed him to continue... "It's all still unbelievable to me! When my company started failing, it was over. I was escorted out of the building as they eliminated my department. My paychecks stopped.  The performance-based stock options and restricted stock which we referred to as "our kid's college funds" were worthless.  The value of my 401K plan tanked.  The only things left were bills, bills, bills and the mortgage(s) I couldn't pay." 

With his voice cracking, he continued... "My wife spent most of these years raising our four great kids and supporting our community with the dollars of our partnership. The hardship of these circumstances, filing for bankruptcy and the embarrassment of our financial crash is taking a personal toll that I can't talk about right now.  I let everyone down."

"In record time, I was out of cash and credit options because I was too financially over-extended to be unemployed for more than a few months.  That was it. How do I recover from this?"

"The short-sale of our primary home in South Jersey earlier in the year was the low-point. It was a painful and devastating experience for the entire family - especially our kids... as we left our hometown that gave us so many special times and all our memories."

Emphatically, he continued..."We had a plan, but that plan failed because we didn't diversify and all our goals were dumped into a single corporate bucket that we trusted - everything was tied to my employment status."

"When my company failed, the value of the financial vehicles that funded my family's existence failed.  Last month, it actually felt like there was no way out."

Energized he asserted, "But today I'm convinced I can get back in the game! I need to build a business or find that next job as soon as possible so I can show my kids how a good person - a hardworking dad - can make a comeback and recover from past mistakes and miscalculations.  I can't let those people who did these terrible things to our companies and our economy take anything else from me." 

"Please help me, Tish.  Call as soon as you see an opportunity out there; you know I'll hit it out of the park!  Just get me the interview.  I'll do the rest because I'm hungry for another win!" 

As he worked to rebuild, his father unexpectedly died of natural causes... adding a personal hardship to an already tough year. 

The new job never arrived.

The Palm Beach Post published an 18-word Death Notice of his passing.  A New York Community Center would publish a single line of condolences to members of his family in a neighborhood newsletter in 2009.

The character failures and alleged crimes in that decade leading up to the economic meltdown made bigwigs like Credit Suisse's Structured Products Boys Serageldin, Higgs and Siddiqui accountable for the adverse impact that wreaked havoc on the lives and livelihoods of wonderful fellow citizens and their families. 

These guys - like all the others - could care less about everyone else who got up everyday to contribute a honest day's work inside their company. The obscene actions of these criminals altered the financial landscape and security of many middle-aged workers who happen to be the children and grandchildren of the Greatest Generation.  For many, their careers were not supposed to be interrupted or ended like this.

What the human faces of the Subprime Mortgage Era taught us was that in those social circles, companies and institutions where self-absorbed experts hide in the shadows determined to cheat while measuring themselves solely by the size of their home, their last paycheck, bonus or donation, even the best employees on earth should expect nothing more than a short 18-word Death Notice. 

At age 43, my former colleague had already figured this out and he took it hard.