Will David Lee throw Kevin Cassidy under the Bus?

When David Lee was accused of being a “rogue trader” who lied to his employer about the value of their portfolio under his management, he took a plea deal and began cooperating with the Government. As part of his deal, Lee was required to be honest with the Government, and remain silent to everyone else. So, we find ourselves in a situation where we’re headed to court and the Government knows a lot about what Lee really did, and we don’t. In particular the Government should know whether Lee considered Cassidy to be a partner in crime – or just one more person that Lee needed to fool in order to pull off the deception of his employer.

The Government wrote its complaint as if it was certain that Kevin Cassidy was in on Lee’s deception. Additionally, they wrote the complaint as if no one in BMO’s Commodities Group was also in on the deception. (The Commodities Group was responsible for policing BMO’s greed-filled, Red Bull guzzling traders) To listen to the Government’s complaint, BMO’s “Police force” was blissfully and totally unaware of Lee’s deception and was completely hoodwinked by Cassidy’s reports.

So the picture we’re presented with is of David Lee, a sophisticated trader of mind-bendingly complex financial products who has a Devil on one shoulder (Kevin Cassidy) and an Angel on the other shoulder (BMO’s Commodities group). Can you imagine the dialog?
Cassidy: C’Mon Do it Do It Do it! Fake the Numbers! The jackasses in your Commodities Group will never be able to figure this complex crap out! It’s just you and me Baby! BwaHaHaHaHa……..
BMO Commodities Group: La-Di-Da.... David Lee told me to look at reports from Kevin Cassidy and not to look at reports from anybody else and that’s just what I’m gonna do, that’s just what I’m gonna do. Yup-yup-yup.

I don’t know if you have a problem with that picture, but I do. For example, the Government makes it seem like it was impossible for Cassidy *not to have known* what Lee was doing – yet at the same time – they ask us to believe that the reports from a single source, a single source selected by the very person the reports were intended to keep honest, fooled an entire “police” department for over 4 years. Now, you know why banks insist on getting reports like this, don’t you? They do it because traders of these highly complex and lucrative products often get mega-stressed out and they start making shit up. They Lie and they’re Good At It! The banks, as the people who employ these stressed out tactical geniuses, have controls in place to rein these guys in when they start running amuck. You just don’t ever, EVER, let a FOX select your Chicken Counter - and that's what we're being asked to believe BMO did.

So it goes. Despite my sarcasm above, the Government has more lethal precision in their own matters than what they are crediting the BMO Commodities Group with having. All of which has got me thinking: the Government must be pretty sure that David Lee is going to throw Kevin Cassidy under the bus when he testifies.

As far as I can see, Lee’s testimony is the best weapon the Government has. I don't think the examples provided in the Government’s complaint are enough to convict Cassidy – but Lee is an admitted liar - and has proven that when the stakes are high, and the pressure is on, he can come through with a believable story that the people with power over him want to hear.

Disclosure: Yes, I am an Optionable shareholder, and yes, during the course of this blog post I also attempted to throw both BMO's Commodities Group as well as David Lee under the Bus. Consider the source :-)