Layoffs Loom for More Senior Level Securities Professionals


More Wall Street jobs cuts are expected as deal-making, capital-raising and lending have been severely crimped by the global economic downturn. The resulting lower revenues are making a new round of layoffs increasingly likely (“On Wall St., few places to hide as jobs ax hovers,” Reuters). As the article implies, the cuts have reportedly even reached senior personnel at Goldman Sachs.

Goldman Sachs terminated “several dozen” employees in its securities division recently, including managing directors. Meanwhile Morgan Stanley is expected to layoff employees in its investment banking and trading divisions. Others will almost certainly follow.

“It’s just the perfect storm: You’ve got zero rates which are unheard of, squashing net interest margins like never before in history; the greatest regulation ever limiting fees, raising costs, demanding more capital; and then you’ve got a brewing economic disaster in Europe,” one analyst was quoted as saying, adding: “They’re getting hit on all fronts, really. There’s literally not one thing to be happy about.”

As of June 1, Citigroup and Morgan Stanley both closed at 41 percent of book value, JPMorgan closed at 67 percent of book value, Goldman closed at 69 percent of book value, and the six largest U.S. banks did not trade at a premium to book value.

The elimination of so many jobs, particularly at senior levels, will likely lead to an increase in the amount of employment-related litigation, and an ever increasing number of independent investment advisory firms.

Over the years, Page Perry has developed particular experience and knowledge in dealing with employment law disputes associated with the securities and financial services industries. Page Perry attorneys have successfully handled employment law disputes involving employee bonuses and loans, constructive termination, restrictive covenants and non-compete agreements, confidentiality agreements, stock option agreements, age, race and gender discrimination, and severance packages.

In the past several years, the firm has won arbitration awards for clients in employment disputes in the amounts of $1.7 and $3.9 million.

Page Perry also has an active regulatory and compliance practice, which advises clients on issues involving formation, regulation, reporting, advertising, supervision, and policies and procedures of registered investment advisors and broker-dealers.

For further information, please contact us.