One day a sign appeared in the lobby of Deutsche Bank’s London headquarters. It spelled out the bank’s name phonetically: DOY-chuh. This was an important corrective: Many of the American newcomers had been telling people that they worked at “Douche Bank.”
Slowly, but not that slowly, the influx of Americans began changing Deutsche’s culture. The newbies didn’t know the first thing about the bank or Germany. All they knew was that their mandate was to drag this tradition-bound institution into modernity. The way Mitchell and his entourage saw it, the place’s stubborn Germanness was the main impediment to unleashing its full animal spirits. Before Edson’s arrival, most of Deutsche’s prosperous business clients had been borrowing money from or issuing bonds via the bank—and then going to a rival, often JPMorgan, to purchase the accompanying derivatives to protect against fluctuating interest rates or other economic forces. Mitchell’s goal was for Deutsche to offer all of those products in-house. He positioned his new derivatives team—led by Broeksmit—at the very center of the bank’s London trading floor, so they were within earshot of as many traders and salesmen as possible. Now they just needed the Germans, with their deep distrust of cavalier Anglo-American investment bankers and derivatives, to unshackle them.
Part of the problem was that the bank had a hierarchy baffling to the Americans. There was a board of directors charged with supervising the company and its executives, but beneath that was another board called the vorstand. It consisted of eight top executives who each had responsibility for a particular part of the bank—investment banking, retail banking, wealth management, legal affairs, technology, and so on. The vorstand operated by consensus and resisted change. Mitchell wasn’t even on the vorstand; no American ever had been. Further complicating things, there was no CEO at the bank. Instead, one of the vorstand’s members was elected as “speaker,” and that man (it was always a man) was in charge, but only so long as he retained the support of his colleagues and of the supervisory board. The Germans saw the overlapping boards and consensus-driven leadership system as a source of strength and stability, preserving the fundamental nature of a proud German institution and, by design, making it hard to change things quickly.
Mitchell couldn’t stand the slow pace and all the pomp. He found it ridiculous that the vorstand had its own floor in Tower A of the Frankfurt skyscrapers, accessible only by a special elevator. Before anyone—visitor, government dignitary, employee—could board the elevator, they had to walk through metal detectors and be frisked by heavily armed security men. It seemed crazy that each office on the floor was palatial and decorated by the bank’s in-house curators with museum-caliber German artwork. The fact that vorstand members traveled with a squadron of motorcycle cops in a convoy of bombproof Mercedes S-class limousines—the reinforced doors so heavy that men had to strain with both hands to open and close them—struck Edson’s crew as completely over the top.
Quite a few members of the two boards didn’t have the faintest idea about how these Americans thought a global bank was supposed to operate, much less one that was trying to secure a foothold on Wall Street. They knew nothing about investment banking or trading or derivatives, other than that they instinctively distrusted these American exports. That wasn’t necessarily a defect—it can be good to have skeptical board members asking rudimentary questions—but guys like Mitchell had extremely limited patience for people who needed things explained twice. What’s more, Mitchell and his colleagues got the distinct impression that the Germans, especially those on the vorstand, were trying to foil them by vetoing transactions and slow-walking decision-making. “They want us dead,” Edson told Anshu. Mitchell nicknamed his German overseers the Forces of Darkness, and the moniker stuck among his troops.
The Germans, for their part, thought the growing pile of derivatives accumulating on Deutsche’s books was a cause for concern—a fear that would eventually prove well founded. “At almost every executive meeting, we talked about the ever-increasing balance sheet size brought about by the ever-increasing volume of derivatives,” Hilmar Kopper, the bank’s leader, would recall. It “was nothing we were proud of.” The Germans looked at Edson’s ilk with a combination of disdain and fear. They referred to the Americans as bandits and anarchists. “We can’t control them,” a vorstand member lamented.
Mitchell seemed to relish his reputation as a powerful outlaw. Once, in Frankfurt, an employee didn’t recognize him and asked who he was. “I’m God,” Edson replied. He realized that the vorstand’s dearth of investment-banking knowledge could play into his team’s hands: What the vorstand didn’t know, the vorstand couldn’t stop. Mitchell demanded that control of the entire markets business be consolidated in London. At the time, several German cities—not just Frankfurt and Berlin but also places like Stuttgart and Mannheim—had their own bond-trading outposts. Broeksmit was put in charge of wresting all this power away from Germany. The situation, explained in his technocratic manner, “was the sort of thing that produced duplication of effort and dissipation of energies.” It did not endear him to the German workforce, but that didn’t much bother Bill, because he believed it was the best thing for Edson and for the bank.
By the end of his first year at Deutsche, Broeksmit was feeling good about his decision to reenter the industry. He was proud of the bank’s progress. Customers were responding well to changes that he and the team had implemented, and the profits were beginning to rush in. “That was really the moment for me when the bank’s natural strengths, its reach, and the new technology and capabilities it had imported began to work together,” he would explain in 2005, as part of an oral history project that the bank commissioned. “There was a lot of talk that [Deutsche] would pull back into becoming a German commercial bank and that this extension . . . into investment banking was an adventure that could be called off,” he continued. “There was no turning back.”
Mitchell had figured out a particularly aggressive trick to get his way with his tightfisted Frankfurt superiors: If they wouldn’t fork out enough cash to keep hiring at a rapid clip, he would threaten to quit. At one point, he went so far as to inform his colleagues and bosses that he had accepted an offer to join the Swiss bank UBS. “It’s Team UBS, boys,” Edson told Bill and Anshu, urging them to join him. Other members of Mitchell’s inner circle were pretty sure he was bluffing, but in any case more money for his team came through quickly after that, and he stayed put. The boards that were supposed to be overseeing Mitchell lacked a sufficient understanding of the markets to be able to figure out what he was doing, much less to rein him in, but they knew that losing him would be a disaster.
One night in 1997, Edson and Suzan hosted dinner for about twenty top executives and their wives. The dinner was at the Mitchells’ sixty-acre estate at Fox Chase Farm in New Jersey, and the whole crew flew in for the occasion. Edson’s son Scott was the valet, parking the Porsches and BMWs in the farm’s horse-riding ring. Suzan served homemade lobster salad. After dinner, everyone retreated to the house’s lower level to play pool and Ping-Pong, which Michael Philipp dominated. Bill sat on a sofa chatting quietly. As everyone got drunk, the men looked around at one another and thought: We are building something special.
In the eyes of his underlings, Mitchell had many great qualities. One was that he would go to bat for you. If risk managers nixed a proposed transaction, he would try to cow them into quiescence. Even during money-losing spells, Edson browbeat his Frankfurt superiors into keeping the bonus pot flush. This was the only way, he lectured, to assemble a world-class team capable of taking on the titans of Wall Street. For bankers all over London and New York, this was fantastic news. The necessity of competing for talent with Deutsche quickly ignited a compensation arms race across the industry. Bob Flohr, the headhunter working for Edson, received congratulatory attaboy phone calls from his peers, who were themselves getting enriched through the spiraling payouts (the headhunters pocketed a percentage of whatever their clients got).
But the simpler things were important, too. If you had a meeting in Deutsche’s New York offices, you could order bottles of Beck’s—Deutsche’s “official” beer—to be there waiting for you and your clients. Another nice perk was the muscle-bound shoeshine guy who roamed the London trading floor, peddling services that included coke and women. Most of all, there were the parties. Technically, they were called “off-site retreats,” lavish team-building junkets every few months in sunny cities like Barcelona. Mitchell framed them to his superiors as an essential way for people to get to know one another—after all, Deutsche was growing so fast that it risked being filled with strangers.
As much as some of the new recruits talked about the ideal of an entrepreneurial ethos, of constructing something big from scratch, Deutsche’s culture was being built on a far less communal foundation of individuals racing to amass personal fortunes. That was fine as long as you had a strong counterbalancing system for managing risks and looking out for clients and making sure that young, ambitious, greedy bankers and traders did what was right for the institution, not just what was right for themselves. But if that culture was missing or weak or inconsistently applied, or if the person who assembled the team and was the spiritual leader and held everything together suddenly wasn’t there any longer—well, watch out.
Mitchell surrounded himself with aggressive executives who were programmed to push the envelope. One colleague described them as “bloodthirsty piranhas.” Edson liked swimming with these fish. And as generous as he was with bonuses and junkets, he could be plenty brusque himself. Striding across the trading floor, he would ask employees how their days had been. When one admitted that he’d had a lousy day financially, Mitchell barked: “I can hire chimps that lose money!” The threat was hardly disguised. Another time he was trying to recruit a star trader from a rival bank. He invited the man to his home in Rangeley. The guy kept saying no, and after hours of trying, late at night, Edson finally gave up. He asked his driver to take the man to the Rangeley bus station; the failed recruit would have to spend the night outside, waiting for a ride.
One of Edson’s piranhas was Anshu, who in early 1997 was put in charge of running the entire sales force of the markets business. Born in Jaipur, India, in 1963, he was a member of the Jains, an ascetic religion that rejects the caste system and preaches nonviolence. When Anshu was in college in India, he fell in love with a smart, beautiful, extroverted classmate: Geetika Rana. When her family moved to the United States shortly after their graduation, Anshu followed her. He enrolled in the MBA program at UMass, where he met Michael Philipp.
A cricket fanatic and cigarette smoker (until, after a successful bout of hypnotherapy, he quit in 1999), Jain was the type of guy who would ask you roughly a million questions when you brought a problem to him and would erupt if you couldn’t answer every single one. He was intensely competitive. Once he, his cousin, and their wives traveled back to India to search for tigers in a national park. Just when they were about to give up, they spotted one. Anshu and his cousin hopped on top of the car with their video cameras. Anshu was so excited, so determined to get the best footage of the tiger, that he jumped down from the roof and started running toward the animal, his camcorder still pressed to his eye.
Edson trained Anshu to have a certain amount of disregard for the rules. On one occasion, Jain was hoping to do a derivatives transaction with a giant hedge fund, Tiger Management. The bank’s risk managers in Germany balked. “This is highly irregular,” a German executive informed him regarding his plans to do a large, complicated trade with a ferocious-sounding American hedge fund. The German told Jain that the deal would have to be considered at the next vorstand meeting. Anshu complained to Edson; if they waited that long, the opportunity would vanish. Edson told Anshu to go ahead and do the trade.
While Mitchell was swimming with piranhas, his closest colleague and friend remained Broeksmit, and he was not a predator. His grasp of complex finance and his proximity to Edson, and the fact that everyone knew that Edson trusted him more than anyone else, served as a potent defense system. Settling into Deutsche, Mitchell and his crew had realized that the German bosses were so clueless that his group could finance itself by borrowing money in the markets without going through traditional approval channels to get their budgets increased. Of course, the more they borrowed and the more they then placed on the roulette table, the greater the losses would be when the ball took an unfortunate bounce. Early on, Broeksmit saw this and put the brakes on everyone’s risk-taking.
Broeksmit’s partner at the bank—the other top trading executive—was Martin Loat. Martin looked up to Bill, partly because of his tight relationship with Edson, and often turned to Bill for counsel on tricky client situations. Broeksmit’s advice tended to be simple: Be honest. Once a corporate client of the bank bought an enormous quantity of derivatives from Loat’s team. Martin knew it was imprudent and sought Bill’s opinion. Soon he, Loat, and an executive at the company that bought the derivatives were all on the phone together. It turned out the client didn’t quite understand what it had just purchased. Normally in the banking industry, that would be a jackpot—few things cause traders to crack a bigger smile than an ignorant client. But Broeksmit recommended that they cancel the transaction, at no cost to the client. So that’s what they did. Don’t do deals that are “intellectually immoral,” Bill told Martin, who never forgot that wisdom.
Such counsel reflected Broeksmit’s evolving role within the bank—a shift that would leave him feeling responsible on the many future occasions when Deutsche would stray from the ethical path. He was still the derivatives whiz and risk expert. But more than that, he was becoming the superego of the investment bank, the guy whom everyone looked to as a restraining influence and, when that failed, to help sort things out when they went wrong. When assessing the merits of a potential trade, he didn’t want to hear the marketing spiel about how great the transaction was. He wanted to understand its essence. “Let’s get down to first principles,” he’d say cheerfully. When a financial crisis erupted in Asia in the late 1990s, he went to Hong Kong to help the bank’s team there get everything under control—assessing the assets Deutsche was holding, deciding which clients it was safe to keep doing business with, and figuring out how to extricate the bank from everything else. He reminded some colleagues of Harvey Keitel’s Wolf character in Pulp Fiction, parachuting into messy situations and coolly, professionally, authoritatively issuing orders to mop things up.
In stressful times, Broeksmit was a calming presence. In euphoric moments, he was a dampening presence. He leveled everyone’s mood and drained the emotions out of volatile situations. In an industry prone to explosions, his moderation served the bank—and Mitchell—well.
Edson and Suzan drifted apart, and in 1997, after two years in England, she and the kids moved back to the United States. The declared reason was that she didn’t want to play the role of a corporate wife, traveling around with her husband and making small talk with strangers. At first Edson traveled frequently back to see his family. He’d jet in for one of Scott’s basketball games or Ellen’s horse shows and then spend the weekend. First thing Monday morning, he’d be back on a plane to Europe. But more weeks started to pass between each visit.
With his family gone and spare time on the weekends, Mitchell joined an exclusive golf club, the Wisley, south of London. Week after week, he and his inner circle at Deutsche would golf thirty-six holes on Saturday and then come back for another thirty-six on Sunday. “This was when we’d figure stuff out,” one participant recalls. Mitchell wasn’t good at golf, but he was a contagious gambler. The bets would start off manageable—maybe $100 on someone’s putt—but they would increase at an exponential rate. Double or nothing was so common it became boring; Edson would arrange subgames within subgames, each with a bet attached to it. By the thirty-sixth hole, it wasn’t unusual for $10,000 or a BMW to be on the line.
Edson was a master of the universe, but he also was lonely. One Saturday evening, Bob Flohr was preparing to host a fiftieth birthday party for himself. An hour before it started, the doorbell rang. Caterers were scampering about, and Flohr hadn’t showered yet. Mitchell was at the door, looking like “a sad little boy on my doorstep,” Flohr thought to himself. Mitchell spent the next hour hanging out in Flohr’s backyard, sipping wine and chatting with Flohr’s chauffeur. Edson seemed happy to just have someone to talk to.
On a warm evening in November 1997, Edson and Michael Philipp went out for drinks. Afterward, they decided to stop by Kassy Kebede’s home in London’s ritzy Knightsbridge neighborhood. Kassy’s flat was in the midst of an extensive overhaul, and his interior designer, a twenty-seven-year-old Frenchwoman named Estelle, was there when the bankers arrived. Estelle was staying with Kassy, and they were in the kitchen, in their pajamas, eating leftovers.
Making himself at home, Mitchell sent his driver to a nearby Lebanese restaurant to fetch food, and they all sat in the kitchen eating and drinking together. Mitchell struck up a conversation with Estelle, a pretty brunette with sparkling eyes. “Where do you see yourself in five years?” he inquired. She stammered something; Edson thought her accent was irresistibly sexy. The next day, he called Estelle at Kassy’s flat and invited her out to dinner. Estelle knew he was married and had kids and was a lot older and was her employer’s boss. She politely said no. Always the salesman, Mitchell eventually persuaded her to let him take her and her sister out to dinner at an Italian restaurant in Chelsea.
Mitchell’s life soon underwent a makeover. He started smoking and dressing in fashionable tailored suits. He stopped shaving and let his hair grow out. He suddenly wasn’t around for weekends—the Wisley golf outings became rare—and he would show up at work a little later in the mornings. His crew gossiped that something was up with Edson, but they didn’t know what.
A month later, Mitchell pulled Kebede aside at work. “I have to tell you something,” he confided. “I’m seeing Estelle.”
“What?” Kassy asked.
“She’s my girlfriend,” Edson said. Word dribbled out to his colleagues, and before long, Mitchell was bringing Estelle along to spend time with his work family. Early in 1998, they moved into a brick cottage that Estelle found on a quiet street in Chelsea. A riotous garden shielded the front of the house from passersby. Estelle decorated the interior, crafting it into what she called “a perfect nest.”
Mitchell remained married, and his family would dismiss Estelle as a gold digger. But she loved Edson and sensed his vulnerabilities. Aside from Bill and Alla, he didn’t have friends—only colleagues. It was a paradox for a man with such power over people—a reflection, perhaps, of Edson viewing the world primarily through a competitive, professional prism.
Edson’s relationship with Estelle went from casual to intense to long-term. They rented a sailboat in Norway. They barbecued on the beach. They rode bikes in bathing suits on a Mediterranean island. On their first anniversary, they flew to Venice and stayed in a five-star hotel overlooking the Grand Canal. The first morning there, Edson walked onto their balcony and admired the splendid view. “I never realized how great it was to have money,” he sighed. For Estelle’s thirtieth birthday, they went to the South of France. Broeksmit and Loat came down for the festivities. Mitchell, his nose bright red from the sun, got drunk and put a ring on Estelle’s finger. Afterward, Bill and Martin pulled their boss aside. “Mate, you can’t do that,” Loat scolded. “She’ll take it the wrong way.”
Mitchell—the human whirlwind, the restless, irrepressible force of nature—had dumped his family for a new, French-accented adventure. It was impulsive and reckless and destructive. He was about to act similarly with Deutsche.