eyes on the U.S.

“Badly Paid” American Banker Struggles To Live Down Woe-Is-Me Interview

Americans are having a field day with Andrew Schiff, a Wall Street banker who complained in an interview with Bloomberg about his “paltry” $350,000-a-year salary. Says Schiff: “The New York that I wanted to have is still just beyond my reach.”

Protesters at Berlin's Reichstag (cadillacdeville2000)
Protesters at Berlin's Reichstag (cadillacdeville2000)
Martin Greive

It all started when 46-year-old marketing director of Euro Pacific Capital, a global investment strategies company, was on his way back from speaking at a conference in California -- and got caught in traffic. This traffic situation was the last straw; he wasn't going to take it anymore. He found himself getting out of the car and screaming profanities.

In a later interview, Andrew Schiff said he was already seething because of a reduced bonus. His basic pay -- $350,000 per year – was peanuts. Net, he brought $200,000 home. As a result, he can't send his kids to private school anymore. He has to make do with his 111-square-meter (1,195-square-foot) apartment in Brooklyn the way it is – no upgrade in the cards now. And his family will only be able to rent the summer place for one month this year instead of the usual four.

Spilling the beans like that to a Bloomberg reporter is probably something Schiff wishes he hadn't done. Americans have been having a very public field day with his words since the interview was published. In this election year, when the growing divide between rich and poor is a central theme, Schiff has become a symbol for the unbridled greed of the financial sector.

If Schiff's bonus was cut, so were the bonuses of many Wall Street bankers – "only" $20 billion were distributed for 2011, 14% less than during the preceding year. But by comparison to the 51% collapse of profits on Wall Street, the cuts seem modest.

"The poor guy..."

Many Americans would like to have the problem Schiff complains of. Newspapers and blogs were quick to mock him -- this "poor" member of the 1% highest earners in the country that the Occupy movement "99%" has been protesting against for weeks. The salaries of many Americans have gone down in the past few years. The average salary – after adjusting for inflation -- is $50,000, well less than a fourth of what Schiff earns.

Plenty of fun is being had at Schiff's expense on Twitter too. "Does anybody have Andrew Schiff's bank account number? I'd like to transfer my last euros to the poor guy," wrote one tweeter.

Schiff is now trying his darnedest to redress the faux pas. He's been calling journalists and telling them he just meant to illustrate how high the cost of living is in New York.

He's not wrong there: according to the Center for an Urban Future, a New Yorker needs to earn $123,000 a year to be counted among the middle class. Pre-schools can cost up to $30,000 a year, and private schools an easy $40,000. Even upper-middle-class Americans find these sums tough to shoulder.

"The New York that I wanted to have is still just beyond my reach," Schiff told the reporter. Many New Yorkers would agree with him.

However, Schiff's defense strategy isn't really making things much better. Honing his "poor me" persona, he told a Washington Post reporter: "I don't have a dishwasher. We do all our dishes by hand."

Read the original story in German

Photo - cadillacdeville2000

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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