One of the backbones of any investment bank is that of trust.
When investment banks fail to live up to the trust entrusted with them, they should automatically lose their client’s money. Except they don’t. They can hinder, stall and for lack of another way of saying this, highjack their client’s account.
This is the true story that I am living with a Swiss bank, let’s call them JB, who had just bought the European arm of another investment bank, let’s call them ML.

Without getting into too many details, JB decided that I will no longer be able to transfer my money or that of my different family member’s money to another investment bank because, as they say, they can. They gave me many silly reasons such as that the trust lawyers won’t allow the transfer. This is silly because the receiving bank told them that they would be liable not them for any calls if applicable. They argued that, even though they have a written confirmation from my family member that I am empowered to act on their behalf with a power of attorney and they have taken orders of sale and buy from me on that basis in the past, it was not valid when it came to transferring the money to another investment bank. It has reached a point that even the credibility of the London based legal firm I have engaged to act on my behalf has been questioned by them. This legal firm is in the top 10 legal firms in the UK. Yet somehow, they are not good enough for JB/ML.

The sad thing about this whole incident is that such childish action by the JB/ML bank is exactly that...childish. It looks like a spoilt brat who is about to lose a toy and is trying everything in its power to delay the inevitable.

What needs to be highlighted is that these investment banks, we think, are run by gentlemen who understand honor and responsibility. The sad truth is that very few of them can live up to that. Most attach themselves onto the potential client like a parasite, more than happy to bend over backwards when they smell the opportunity to make money off their potential client’s back. The moment that money is in their grasp, they will try everything to ensure that money stays with them using every legal avenue available to them. This is why two things are important to have with you before entrusting your hard earned money to these people. First, spend some money and hire a good lawyer to vet every paper you get from them and agree only to the points that you accept and don’t sign blindly thinking that they are there to protect you. The clauses in their contracts are there to protect them not you. Second, ask around those who have dealt with the proposed company. As board member of one of the most prominent Alternative investment companies in the Gulf, I know what this is like because before any of the institutional investors invest with us, they call previous investors with us and ask what our experience has been like. You see, trust is a word that investment banks live and, theoretically, die on. They expect us to trust that they will serve us as customers. In the most, they do. It is when you decide that their services is no longer required that they become in the driver’s seat and can drag things on forever if they like. Smart investment banks, unlike JB/ML who obviously will never see another red cent going their way from me or my family, understand that if the client is not happy today, we should make the transition smooth so that there is a possibility to win him/her over in the future. Also, living up to the trust bit, it is a way of signaling to the client that we value our reputation. Intelligent investment banks know that reputations take years to build but a matter of seconds to destroy. What JB/ML failed to comprehend is the degree their childishness might cost them. To annoy your customer is one thing. To perpetuate and exacerbate a situation that could have been resolved quickly by ignoring it hoping that it would go away is the best way to show a lack of leadership that appears to be endemic within that investment bank. I just pray that their current clients understand that this too can happen to them no matter what precautions they might have taken. Don’t think that this can’t happen to you too. Worse are those potential clients who think that their amount is big enough that the investment bank will not screw with them. Let me put it this way, unless you are the government of a country that can affect them severely, you too are liable.

Think twice before you think the name and reputation of the investment bank is your protection. It’s there to protect them not you. As the wonderful bard once said, “what’s in a name?” He was talking about Juliet being a rose. If anything I have learnt from the JB/ML experience it is that this investment bank in particular is not the rose but the stuff that roses need to grow.

As a gentleman, I would never mention the name of the bank that is not worthy of my trust but if you ask me politely...