Hi readers,
First off — I’ll be filling in for Olivia over the next few months with leading our stellar squad of finance reporters and sending out the weekly debrief. So, hello!
It’s been a busy week here on the finance team, with lots of deep dives, people moves, and scoopy tidbits to take in. I’ve pulled all the highlights together, while resisting the temptation to go into full-blown, six-page narrative memo mode. (More on that in just a bit.)
Let’s get to it!
First, a fun story on Friday gave one of the first tangible signs of how Goldman’s new cochief information officer, Marco Argenti, and new chief technology officer, Atte Lahtiranta, (who we spoke to last week) plan to shake up the Wall Street bank’s engineering division and craft a culture more along the lines of big tech.
Goldman Sachs made a splash earlier this year when it announced it had hired Argenti, a top exec from Amazon Web Services. He officially joined on Oct. 21 and, as Dakin Campbell reported, hasn’t wasted any time bringing over one of his ex-employer’s storied quirks.
Earlier this week, Argenti sent an 800-word memo to Goldman’s 9,000-plus engineers. The takeaway? Memos! Ditch PowerPoint and write more memos. Specifically, narrative memos. Argenti’s memo even gets meta with a reference to another memo about his memos. Goldman will soon be be providing employees with samples and guidelines. In the meantime, Argenti gave some key tips. Read the full memo here.
On Wednesday, Rebecca Ungarino and Dan DeFrancesco reported that TD Ameritrade has been thinking about ways to leverage its experience in retail trading into opportunities in fantasy sports — and potentially even sports betting.
“We do feel like there are interesting analogs in applying market constructs to fantasy-sports-type things,” TD Ameritrade’s Chief Information Officer Vijay Sankaran told them in an interview at the firm’s New Jersey offices.
Looking for new businesses to tap makes sense after many online brokers raced to slash stock trading commissions to zero. Interactive Brokers in July announced a simulated-sports-betting exchange, then was an early mover in this fall’s cut-throat broker wars when it announced unlimited free US stock and ETF trades via IBKR Lite.
Payment for order flow from high-speed-trading firms, as well as spreads on cash accounts and margin lending, are some of the other ways brokerages can still make money.
But those spreads have come under pressure after a round of Fed rate cuts. And as the race to zero on retail commissions hit a frenzy in October, we reported that an SEC official praised lower costs for customers, but gave a gentle reminder to brokerages about best execution when it comes to where they send trades. Read more here about TD Ameritrade’s big-league ambitions.
Must-know people moves
- Viking Global’s former co-chief investment officer is gearing up to launch his own fund in mid-2020 and join the long list of Tiger Management grandcubs
- Goldman Sachs announced its new class of managing directors, and millennials dominated the list
- WorldQuant is losing a longtime recruiter — and he’s leaving to start his own business
- Two portfolio manager have left Carlson Capital, plus we have details from the firm’s latest investor letter
- Robinhood’s VP of product has left the stock-trading startup after less than two years on the job
- Wells Fargo head of cards and retail services has taken a job at Equifax. Wells told us who’s filling the role in the meantime, but the bank hasn’t named a permanent successor.
Key headlines
- Prosper, a pioneer of the peer-to-peer lending industry, has held talks to sound out potential buyers
- SoftBank-backed insurance startup Lemonade postponed IPO plans after hiring banks and plotting an offering for this year
- Hedge-fund firm Two Sigma just started selling a risk-analysis tool, and it shows how secretive quants are now looking to make money sharing their tech
- Stanley Druckenmiller dumped more than 2 million Uber shares, but other tech names like Netflix and Amazon are getting plenty of love from billionaire money managers
I’ve also rounded up below some excellent weekend reads that take you inside an ongoing legal department restructuring at Walmart, Bank of America’s banner year in mortgage lending, and more. Plus, fresh proptech and insurtech news, and a couple pitch decks to boot at the very bottom.
As I wrote in my previous roundup, post-WeWork IPO implosion we’re turning our attention to other high-flying startups that have received big SoftBank checks. Last week, we had an inside look at how SoftBank-backed Fair burned through nearly $400 million in 10 months. Anywhere else you’d like to know more about? Let me know at mmazzilli@businessinsider.com.
Have a great weekend,
Meredith
Inside a restructuring of Walmart’s legal department that’s dragging on longer than execs promised. Some employees are exiting, and one used a meme of Al Pacino to say goodbye.
Walmart is restructuring its law department, and a raft of changes have unsettled insiders responsible for handling its massive caseload.
The reorganization — including job eliminations, rehires, and a reporting shift — dates back to the summer, but changes are ongoing. So far, insiders said that it has been marked by delays in a promised rollout of a new organizational structure, the outsourcing of some functions, and departures that have rattled morale.
Over the past two months, Business Insider reviewed internal emails addressing the changes and spoke with three people with direct knowledge of the restructuring. Walmart confirmed the restructuring to Business Insider and provided additional details on its reasoning for the changes.
Bank of America’s mortgage tech bets have helped save billions and spark a boom in home lending. Here’s how it’s outpacing JPMorgan and Wells Fargo.
Bank of America is on pace to have a banner year in home lending.
After several years of watching its mortgage-origination volumes decline, the Charlotte-based megabank has turned around and leaned on the throttle in 2019. It’s seen nearly 60% growth in origination volume through the third quarter.
Banks are seeing a Fed rate cut-fueled resurgence in demand from borrowers and refinancers, but Bank of America’s volume growth is outpacing big rivals.
Business Insider talked to the bank’s head of consumer lending, Steve Boland, who attributed that to revamping its employee-facing tech platform, its 1.5-year old mortgage app, and hiring more support and expert staff in branches.
America’s biggest banks will soon have to add billions to their reserves, and they say they could cut lending in response
It sounds counterintuitive and vaguely “Minority Report”-ish: When a bank makes loans that aren’t repaid, should it take a financial hit for its losses before they actually happen?
That’s what big banks will face starting in January. They’ll have to record all their expected future losses on their loans as soon as the loans are issued, thanks to a new accounting rule. That’s going to force some banks to boost their reserves by billions of dollars — up to $6 billion at JPMorgan Chase, for instance. Companies like credit-card issuers and auto makers could get hit also.
Fintech and proptech news
- The CEO of North Carolina-based Spreedly says the payments software startup is eyeing a push into Latin America after a $75 million fundraise
- Here’s the pitch deck that insurtech Quantemplate used to nab $12 million and attract funding from megainsurers like Allianz
- Internet-of-things startup Particle went from a failed Kickstarter to powering smart air conditioners and Jacuzzis. Here’s the pitch deck it used to raise $40 million.
- Proptech is getting a ton of attention, but its exact definition is hard to pin down. Co-founders of a big VC in the space spent 18 pages of their book trying to explain it.
- Neuberger Berman is rolling out adviser-client portals, a new app, and a client data hub across the 80-year-old firm by the end of 2020
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