◼ FINANCE Bloomberg Businessweek December 23, 201932
askedtheaudienceatanindustryconference
inOctober.“Let’sdoatleastwhatyouwouldhave
neededtogetthroughthefinancialcrisiswithouta
problem.Fairstart.Andlet’sdialit upa bitbecause
thingscouldgetworse.Fairenough.Andlet’sadda
buffertothatbecausetherearealwaysunintended
things.Andlet’saddanotherbufferbecausewe
can....Well,hangon.”
Gorman’spanelmate,JPMorganCEOJamie
Dimon,saidthepost-crisisruleshadaddressedthe
lackofcapitalandintroducedimportantsafeguards.
LehmanBrotherswouldn’tfailif it wereregulated
undertoday’srules,hesaid,butbanksareasking
thattherulesbemadelessonerous.● Someapologies,yes,butthe
dayofreckoninghasyettoarriveTheunusualthingaboutthesexistcommentfrom
money-managementbillionaireKenFisherwasn’t
whathesaidorhowmanypeopleheardhim—
it wasthathegotintotroubleforsayingit.Forat
leasta decade,theheadofFisherInvestments,an
empirethatoverseesmorethan$115billion,has
beenknowntomakecasualreferencestosexand
genitaliainfrontofhiscolleaguesandpeers.People
who’veworkedwithhimsaytheusualresponseto
hisinappropriatelanguageis nervouslaughteror
awkwardsilence.Hesufferednofalloutwhenhe
saidata conferencelastyearthathislife’sregret
wasnothavingmoresex,aftercomparinga mutual
fundthatbragsaboutperformancetoa bachelor
whowalksuptoa womanina barandasksherto
sleepwithhim.
ThatresponseshiftedinOctoberwhenFisher
madea crudeanalogybetweentheartofwooingcli-
entsandseducingwomen.Thistime,theunwritten
industryrulethatvaluesdiscretionandrelation-
shipsabovemosteverythingelsedidn’tstopat
leastthreepeopleintheaudiencefromsayingthey
werefloored.Thenseveralclientsstartedfleeing:
pensionfundsinMichigan,theninPhiladelphia,
Boston,andIowa;soonafter,FidelityInvestments
andGoldmanSachsGroupInc.Altogetherthey
pulledabout$4billion.It tooktwodaysafterthe
conferenceforFishertoapologize—atfirsthesaid
hedidn’tgetwhatthefusswasabout.
More than painting a picture of rich menbehavingbadly,talesliketheFishersagashow
thatpowerfulpartsofthefinanceindustryhaven’t
caughtupwiththetimes.Otherstoriesthisyear,
fromassaultandunwantedtouchingatritzyLondon
firmstoallegationsofharassmentina NewJersey
brokerage,revealwhy.Eveninanerawhenjust
abouteverycompanysaysit championsdiversity
andcravesinclusion,a corporatemachinesilences
employeesandmaintainsWallStreet’sstatusquo.
Toworkersinallsortsofjobs,themechanicswill
soundfamiliar:forcedarbitration,captivehuman
resourcesdepartments,high-pricedlawyers,anda
cultureoffear.Butthefinanceindustry’smastery
ofthissystemhaspreventedtherevolutionofthe
pasttwoyearsfromdisturbingit.Instead,there’ve
beenonlyraremomentsofrevelationthathintat
whatfuturechangemightlooklike.
WallStreetcanstillresemblea fraternitywith
nicerhouses.Menbuiltalmostallthebigbanks,
private equity firms,hedge funds, andasset-
management companies. Even if men can no longer
openly expense trips to strip clubs, they continue
to run the industry. Beneath the sanitized surface is
an old mix of entitlement, exclusion, and secrecy.
Once the #MeToo movement began, finance, unlike
so many other businesses, didn’t have a major reck-
oning or, in some corners, experience much reflec-
tion. “The primary difference for women that speak
out on Wall Street vs. other industries is money. And
money is power, and Wall Street has the most,” says#MeToo? Wall Street Still
Doesn’t Get It
The Bank Policy Institute, a trade association
representing the largest U.S. and European banks,
has railed against eliminating risk adjustments in
capital calculations. “It is akin to setting the same
speed limit for every road in the world, whether it’s
a highwayora schoolzone,”BPIPresidentGregBaer
wroteina 2017blogpost.ForStanford’sAdmati,
though,themetaphormissestheregulatoryreality.
“Riskweightshelpbanksobscure,evermore,the
totallyrecklessspeedatwhichtheyarestilldriving,”
shesays.�VernonSilverandYalmanOnaran“The system
was invented
by firms to
protect firms’
own interests ”THE BOTTOM LINE Financial companies around the world are
still using accounting maneuvers that mask the true state of the
industry, as they did before the financial crisis.