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BLACK ON WALL STREET:

Joseph Jett (pictured above) is a brilliant African-American man with degrees from Harvard Business School and MIT.

In 1991, Jett joined the prestigious Wall Street firm, Kidder, Peabody & Co. In 1992, he earned Kidder, Peabody & Co., $28 million in profit.

Traders earn 10 to 12 percent of gross revenue in bonuses, since Jett earned $28 million that year; he expected $2.8 million in bonus money. But he knew, some firms were known, to shaft traders.

In 1991, allegedly, the head of human resources, a man named Granville Bowie, told a black trader named Buddy Fletcher that he was not going to be paid the standard 10 percent because he was already earning more money than almost any black man alive and that he should be content with a smaller bonus, Fletcher quit.  Fortunately, Fletcher had the state of mind to tape-record the conversation with Bowie.  Fletcher sued Kidder charging racial discrimination and won but he saw his verdict reversed, appealed and won again.

Minorities usually work in certain positions on Wall Street and trading is not one of them.   Municipal bond brokerage is.  Since big cities are now run by black mayors and black officials. Wall Street likes to send black municipal bond brokers to meet them.  Also, to try to prove that they are serious about diversity, many of the firms recruit black kids from junior colleges and community colleges, never Ivy League universities.  They joke behind closed doors, we are setting these kids up for failure.

So when Jett received an end of year bonus that was less than half of what he expected ($1.6 million), Jett was livid. Everyone else received 10 percent but Jett.  When he complained to his boss, Ed Cerullo, he replied, you are not an established trader, you just got here; you have to prove yourself. We’re not going to pay for a fluke year.

In his personal life, Jett exclusively dated blondes.  One day, he had a 2 ˝ hour lunch with a 6’4 blonde.  His boss, Ed Cerullo, found out about it and called him into his office.  When Jett arrived, he said, “I will not tolerate any type of relationship with women at this firm.  I’ve told you about the firm’s culture and how people are sensitive to interracial relationships.   I think it’s to your advantage not to have her come up here.”

Despite being rich, Jett still occupied an apartment in the ghetto, located on the Lower East side of Manhattan.  Gunfire erupted each night and the area was a known hangout for drug dealers, pimps and prostitutes and a crack house was located across the street.

Jett would walk past homeless people and winos on his way to the subway each morning in his Brooks Brothers suits, during evening hours; he rode around in limousines with models.

He had $4 million dollars in his accounts but he refused to move and when he did, he moved to a similar area in Hell’s kitchen.

One morning, while riding the elevator with Cerullo and a trader.  The trader asked Jett what he did over the weekend, Jett replied, ‘blondes.’ The trader laughed but Cerullo frowned.

Meanwhile, a black managing director was fired for the sexual harassment of a white woman.   After the firing, the accuser began to reach out to Jett. He thought she was trying to set him up.  The next day, Cerullo called him into his office.

When Jett closed the door, Cerullo said, I thought I told you that the firm is not comfortable with relations between black men and white women. Jett was stunned when he left his office.

Shortly afterwards, a black man, Chike-Obi, a respected trader (on Wall Street) was also fired for sexually harassing a white woman.  Were these random or calculated incidents?  Certain people were speculating that these women were told to befriend powerful African-American men, go out on dates with them and then file sexual harassment claims.  This way, certain firms could keep their companies legally (all white).

Jett accompanied Cerullo and a few other traders on a retreat in Vail, Colorado. Cerullo decided to call a strip club and asked do you have any black girls (for Jett) when the strip club replied no, Cerullo said, well, we’ll have to cancel then.  Later, Cerullo was allegedly, overheard telling the other traders, he didn’t want Jett leering (at our women).

When they returned, Jett started conversing with a white woman (Val) every day, she was a sales assistant at a brokerage house.  They found any excuse to call each other.  She described herself as a petite blonde, Jett described himself as an Eddie Murphy type but he could tell that she didn’t believe him.   She asked for his home number and they continued conversations late into the night.  They read favorite poems to each other and talked about hopes and fears.  By summer, Jett was convinced he’d fallen in love with her over the phone.  She felt the same way. They agreed to meet one afternoon.   Val said she would be wearing a blue dress.

Jett arrived, Jet spotted her right away, and thought; she looks lovely.  When he approached and introduced himself, she instantly reeled backwards.    Her knees buckled.  She said nothing and then she started to cry.  Jet said, “obviously, my darkness has caught you by surprise, I told you I resembled Eddie Murphy; remember?”  She said, “I forgot” as tears rolled down her face.  Jett told her, but I’m still the same person you spoke to last night, that you laughed with. She said, but it does matter, oh my God, I wish I were dead!  She started sobbing hysterically, between sobs, she said, “I can’t do this!”  Jett stood up and walked away.

At the end of 1993, Jett attended a conference of Kidder’s top earners.  People assumed he was there for the Affirmative Action program-they were stunned when he told them, he was a strips bond trader.  Adding, he made $34 million the previous year.  Despite this, when he returned to his hotel room, he found a package of conference activities, the package was addressed to ‘Joseph Jett, Affirmative Action.’

Jett traveled to Europe and Japan every month and he had 3 traders in England.  When he returned from a European trip, Cerullo called him into his office and told him, ‘I’m concerned that you are seeing that blonde, Jean, from London’ when Jett assured him nothing was going on, Cerullo changed the subject.

Around this time, Jett had moved into a Tribeca loft so that his parents and other relatives could visit.

Despite grossing record profits. In 1994, Jett noticed that people were acting different towards him, distancing themselves, and not returning his calls.

A friend told him that he overheard a trader say, ‘They say it’s the end of the black beast on Wall Street.’  Another red flag went up when Jett interviewed a trader he was considering hiring, the trader openly wondered, why should I work for you when you are about to be fired?

When Joseph Jett was fired, it made headlines.  He found himself at the center of one of the biggest Wall Street stories of the decade. Just months after naming him ‘Man Of The Year,’ for heading a phenomenally successful bond-trading team. Kidder, Peabody & Co. accused him of recording $350 million in phony profits and taking more than $8 million in bogus bonuses.   Jett was forced out of his job and charged with masterminding one of Wall Street’s largest securities scams.

Shortly after the firing, all of Jett’s accounts, containing millions were frozen and ‘Law & Order’ did an episode portraying a devious black trader, portrayed by black actor Courtney Vance.

When the scandal first hit, the media camped outside of his apartment building.  When he walked out to greet them, they walked past him, thinking, Jett couldn’t possibly be a ‘black man’ working on Wall Street, during this time, a photo of Jett had yet to reach media outlets.

Jett’s boss, Ed Cerullo said he wasn’t aware of Jett’s phony profits.

Cerullo and the other managers disappeared with millions. Cerullo paid a $50,000 SEC fine and was suspended for a year. He retired with a $7.5 million dollar severance package.

Joseph Jett appeared on ’60 Minutes’ telling his side of the story and declaring his innocence.

He would later say, ‘People I’d cared about, trusted and considered friends disappeared from my life.’

One of his trusted and closet friends said, “You’ve ruined everyone’s life and I have only one thing to say to you N***er, I hope you go to jail. Have a good life.”

Joseph Jett was acquitted of criminal charges in 1996 after being sued by Kidder for $82.8 million in fraud claims.

Jett currently runs a hedge fund.

Source: “Black and White On Wall Street: The Untold Story Of The Man Wrongly Accused Of Bringing Down Kidder Peabody” by Joseph Jett and Sabra Chartland.

 

 

 

 

 

 

 

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