We sat down with David Enrich to discuss his new book, The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History. The book details the actions of an oddball group of bankers, traders and brokers from some of the world’s largest financial institutions made a startling realization: Libor – the London interbank offered rate, which determines the interest rates on trillions in loans worldwide—was set daily by a small group of easily manipulated functionaries, and that they could reap huge profits by nudging it to suit their trading portfolios.
The anti-hero Tom Hayes, a troubled genius mathematician, became the lynchpin of a wild alliance that among others included a French trader nicknamed “Gollum”; the broker “Abbo,” who liked to publicly strip naked when drinking; a Kazakh chicken farmer turned something short of financial whiz kid; a broker known as “Village” (short for “Village Idiot”) and fascinated with human-animal sex; an executive called “Clumpy” because of his patchwork hair loss; and a broker uncreatively nicknamed “Big Nose.” Eventually known as the “Spider Network,” Hayes’s circle generated untold riches —until it all unraveled in spectacularly vicious, backstabbing fashion.
The Spider Network really makes one question the entire system. The underlings get fried while senior management skates and goes on to bigger and better things. But that’s just the way things work according to David Enrich.