This didn’t just threaten Oesterlund’s fortune. It also had the potential to carve open a portal into the world of offshore finance, a place that the global elite has spent hundreds of millions of dollars to build and defend. In the offshore archipelago, their interests are hidden behind shell companies and trusts, their anonymity guaranteed under the law, from Delaware to the Bahamas to the South Pacific. James S. Henry, a former chief economist at McKinsey, calls the offshore financial world the “economic equivalent of an astrophysical black hole,” holding at least $21 trillion of the world’s financial wealth, more than the gross domestic product of the United States.
On an April evening in Moscow, I met with a broker who had intimate knowledge of the structure of the mirror trades. The city was emerging from the choking cold of winter, and young people flirted outside Paveletskaya Station as if it were high summer. As the broker and I walked across the square, he characterized mirror trades as just one of a thousand ruses employed by smart businessmen. But why, I asked him, would somebody with a prominent position at a major bank get involved in such a scheme? Wiswell’s annual compensation was in the region of a million and a half dollars. The broker laughed. He said that Wiswell had been paid handsomely by clients of the mirror trades. For the architects of the scheme, the broker explained, it was worth it to bribe someone inside the bank: “Guys always pay something. They think it will hook you, so you are not going to do unexpected things.” In the estimation of the broker, Wiswell was a useful functionary but hardly a criminal genius. Sometimes, the broker said, money was transferred into an offshore account maintained by Wiswell’s wife, and sometimes cash was delivered to Wiswell in a bag.
The art world knows about prices floating ever higher on abstraction and hope. The resonances aren’t completely coincidental. Both venture capitalists and art buyers are in the business of valuing the invaluable. Both stake their reputations on exquisite selection. Both nurture talent before it can support itself. Both have a soft spot for youth, for unbowed ego, for the myth of solitary genius, for the next new thing. Both operate in a world of frustratingly limited information and maddeningly unpredictable success. Both depend on consumer culture while holding themselves superior to it. And both the art market and venture investing have become increasingly winner-take-all games, with more clout to the companies and artists backed by the most powerful dealers or venture capitalists.
Credit : Harold Cunningham
Bharara argues that publicizing criminal behavior is a public duty, for the purpose of deterrence. “It’s not my job to put out a ten-point program to fix corruption in New York State,” Bharara told me. “Prosecutors alone are not going to solve the problems. But we do want the problems to be solved. I can say that when you have an overabundance of outside income for legislators, when you have an overconcentration of power in the hands of a few people, and when you have a lack of transparency about how decisions are made and who makes them—that it is our job to point that out. We can give these issues a sense of urgency. A lot of people wake up to the possibility of better government when you start putting people in prison.”
“It’s not necessarily about money, it’s about winning,” he told a visiting group of American college students. He told them that to understand trading, they needed to forget everything they learned in economics class and envision the amoral, take-no-prisoners world of “The Hunger Games.”
“The only time when people cooperate is to prolong their own lives,” he said. When rivals are no longer useful, “you stab them in the back.”
He told students he had accepted the fact that he was a rogue trader—but in his telling, it didn’t sound all that sinister.
A rogue trader, he said, “is a risk taker. It’s not a crime. It’s violating the mores established by the institution that you work for. It’s a rebellion against institutional controls that deny individuals opportunities for self-actualization.”