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What happened to Bob Diamond of Barclays, and a "tone-deafness to public outrage"

I'm just catching up on the history of Bob Diamond, the American-born Barclays executive who made the naming rights deal with Forest City Ratner.

From a 10/19/08 article in Fortune, Barclays: Wall Street's new gambler: When Lehman tanked, Barclays saw a juicy opportunity and snatched it up. But now the London powerhouse has problems of its own:
An American expat whose office is lined with Red Sox gear, [Bob] Diamond should by all rights be smiling. He spent the past decade building an investment-banking operation from scratch at the big but unflashy British bank founded by Quakers 318 years ago. Barclays, with assets of $2.7 trillion, grew to become Britain's third-largest bank after HSBC and the Royal Bank of Scotland.
Then, as Wall Street cratered in mid-September, Diamond, 57, and his boss, CEO John Varley, 52, saw a once-in-a-generation opportunity: Buy the stripped-clean North American business of Lehman Brothers, including most of its people, its brand name, and its clients - but not the toxic assets that bankrupted it. Overnight, the deal would make Barclays a major U.S. player, nipping at the heels of J.P. Morgan and Citigroup.
....On paper the deal looks like a steal: For $1.5 billion, Barclays got a valuable Manhattan skyscraper, two New Jersey data centers, and a role as a major player on Wall Street. But some analysts worry that the acquisition is also a risky venture for Barclays at a perilous time.
Nearly four years later, the risk had hit Diamond, though in a way unanticipated. Then, from 7/3/12 Fortune, The fall of Bob Diamond:
For years, Diamond’s big pay packages and image as a Yank bringing Wall Street to High Street made him a top target. In fact, vilifying Diamond was always less than logical, since Barclays, unlike Lloyds and Royal Bank of Scotland, weathered the financial crisis without a government bailout. Diamond also transformed Barclays from a sleepy UK franchise into a world-class investment bank over fifteen years, standing virtually alone in doing it from scratch.
In fact, Diamond’s jaunty defense of the universal banking model he’d spent his career building only heightened the tension. It’s precisely that model that is now under siege...
As soon as the $453 million in settlements with the CFTC, U.S. Justice Department, and Britain’s Financial Services Authority were announced last Wednesday, it was clear that politicians of all stripes wanted him out.
...On Wednesday, Diamond will appear before a committee of Parliament investigating the LIBOR scandal. The members are certain to grill him about one of the most mysterious aspects of the case, Barclays policy of falsifying its borrowing costs during the financial crisis to forestall rumors it was failing.
According to Barclays documents, Diamond discussed the conversation with his chief operating officer of the investment bank, Jerry del Missier. Diamond did not think he had received instructions to artificially lower submissions from the Bank of England. He also denies instructing del Missier to lower the data. But del Missier “concluded that an instruction had been passed down from the Bank of England not to keep LIBOR so high. He passed down an instruction to that effect to the submitters.”
 From 7/30/12 Fortune, The death of Bob Diamond's dream for Barclays:
By the time the call came, Bob Diamond knew his tenure as CEO of Barclays was at an end. It was 9:30 p.m. on Monday, July 2, and Diamond had just gotten home from the office when the bank’s outgoing chairman, Marcus Agius, and lead director, Sir Michael Rake, phoned to say they were on their way to Diamond’s townhouse in the tony London neighborhood of Belgravia...
The day had started with a typical burst of Diamond optimism. Despite the Libor scandal raging around him, the 61-year-old CEO reckoned he’d be running Barclays — a 322-year-old institution whose assets of $2.4 trillion rank second in Britain, behind HSBC, and sixth in the world — for years to come. On Friday he had secured the endorsement of his board and his large shareholders. On Sunday, Agius had decided to step down, partly in an effort to save Diamond. When Diamond arrived in the office that Monday, he got a phone call from Andrew Bailey, chief of the Financial Services Authority’s banking unit, and discussed the news about Agius. Diamond told Bailey that his board was behind him and that he had no intention of resigning. Bailey expressed no objections.

But as the day wore on, evidence mounted that the British regulators were about to throw Diamond under the lorry. ...So ended the career of a star banker who spent a short, controversial term as CEO but leaves a legacy as a great franchise builder. “He deserves a place in the pantheon as one of the few to ever build an investment bank virtually from scratch,” says Robert Steel, a former Goldman Sachs vice chairman.
The upshot:
The picture that emerges is that of an executive who believed that he could rally wary regulators and an angry public to his side, but who misjudged the brewing political storm.
Barclays is hardly the only big bank to be caught up in the Libor scandal....
New York's mayor, with a bias toward action, was a fan:
Diamond succeeded by making highly contrarian bets. He’s also, friends and colleagues agree, an energetic and inspiring leader. As New York Mayor Michael Bloomberg says, “He’s a guy who’s always ‘up,’ who never gets depressed and makes things work. Look at Lehman: All the potential acquirers thought about it, and he did it.”
Where he ended up

The New York Observer, in a 1/14/13 article headlined Guess Where Barclays’ Disgraced CEO Bob Diamond Spent His Ill-gotten Gains?:
But as real estate chronicler Michael Gross proves in a new Newsweek article, promising clues may well be red herrings. When Novgorod LLC purchased a nine-room spread on the 40th floor of 15 Central Park West in 2009, it was assumed that the buyer was one of the many rich Russians who had been sniffing around the building...
Mr. Gross, who is finishing up a book on 15 CPW, reveals that the buyer wasn’t a rich Russian at all, but rather an American: Bob Diamond, the Connecticut-born CEO of British bank Barclays. In 2009, Mr. Diamond had yet to be raked over the coals for his role in the Libor interest rate scandal (for which he would lose his job, though not his fortune), but he was being pilloried in the press for his excessive pay.
Not hard to see why Mr. Diamond would want to hide the fact that he was buying an extravagant spread at New York’s most luxurious condo in the midst of the global financial crisis.
A 5/5/13 Times Magazine article, Robert Diamond’s Next Life, pictured Diamond at a Brooklyn Nets game at the Barclays Center. Andrew Ross Sorkin wrote:
In the sparse office he now occupies in the Seagram Building in Midtown Manhattan, Robert E. Diamond Jr., the former C.E.O. of Barclays, paced in circles and tried to explain how he had gone from being one of the highest-ranking and highest-paid bankers in Britain to a guy who takes the subway to this office in exile and waits in line for his coffee at a cart on Park Avenue.
...The conventional explanation is that Diamond, 61, was ousted last July after regulators in Washington and London uncovered a “pervasive” scheme by several banks, including Barclays, to manipulate a key interest-rate benchmark known as the Libor, or London interbank offered rate....Despite all the headlines — and there were hundreds of them — Bob Diamond’s role in the scandal was minimal, and perhaps wildly overblown. It may have been the nominal cause for his dismissal, but what really drove his departure was that he had become, as one member of Parliament described him, the “unacceptable face of banking.”
Sorkin suggested it was a caricature that Diamond was a reckless banker, but "Barclays was the only major bank in the U.K. that didn’t need to be bailed out."

The article has a mostly flattering backstory on Diamond, except for his business machinations, notably the dramatic poaching of his Morgan Stanley team while his boss was in flight, which led to that boss, John Mack, calling him a “duplicitous scumbag.”

On the arena

Sorkin wrote:
One Sunday a few weeks ago, Diamond took the subway from the Upper West Side to the Barclays Center in Brooklyn for a game between the Brooklyn Nets and the Atlanta Hawks. Since he returned to New York, his pilgrimage to Brooklyn has become a regular affair, often a couple of times a week. On this night, he was joined by his three children, Robert, Nell and Charlie, and a group of their friends.
Though Diamond resigned before the arena ever opened, it might not have existed without his decision for the bank to pay $400 million to slap its name on the building. His skybox, which he personally pays for, is a homage to his time at Barclays, its walls lined with pictures of some of his proudest moments. There is one of him and Jay-Z breaking ground on the arena, him playing golf with Phil Mickelson, him handing over the championship trophy of the English Premier League, which Barclays sponsors. (As a consolation prize, the investors behind the arena added Diamond to the board of the Barclays Center after he left the bank.)
Ah, it's not $400 million but rather $200 million. But it is interesting that he made the board.

And an assessment

Sorkin reported:
When I reached a senior colleague at Barclays, he offered perhaps the most cogent explanation for why Diamond ultimately lost his job. “Did he deserve to be fired for Libor? No. He was a scapegoat. But that’s not why he resigned. He had lost support. And it’s not that he somehow missed all of this coming. He knew it was there the whole time. I think he made a calculated assessment that there was no reason he needed all these people, because he was producing big profits.”...
His tone-deafness to public outrage over the banking system was not a new problem. In 2011, for instance, he caused a monthlong stir in Britain after he said at a hearing in Parliament: “There was a period of remorse and apology for banks. I think that period needs to be over.” Now, reflecting back on that statement, he said: “I don’t know if I regret the quote or not. I certainly regret what was taken away by certain people.”
A reader's comment

Richard, Denver CO:
This sums the problem very neatly: “Up until all of this, I didn’t even know the mechanics of how Libor was set. If you asked me who at Barclays submitted the rate every day, I wouldn’t be able to tell you. I bet you if you asked any chief executive of any bank on the street, they would give you the same answer.”
Such as Diamond are inadequate to the real job of Chief Executive: limited energy, limited vision, insensitivity to risk aspects of the core bsuiness, woeful lack of curiosity about weak points while preoccupied reaping outsized rewards for institutional strength -- a strength based principally on the very size the Diamonds of the industry fail to see carries outsized risks. Leadership acumen will not be mentioned in his biography's index.


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