Lehman Brothers won a bidding war with Morgan Stanley to hire Mike Cudzil, a pass-through trader from Citigroup, according to former colleagues and buy-siders. Cudzil, reached at his desk, declined to comment. Lehman managed to pry Cudzil away from Morgan Stanley, where he was said to have verbally agreed to a contract, telling senior mortgage-backed security pros there that "he was on his way over," according to a senior Morgan Stanley trader.
Specifically, Lehman attracted him with a pay guarantee in the neighborhood of $2 million for one year, an offer considered high for a trader of his experience, say people familiar with Lehman's plans. Dave Sherr, Lehman's MBS chief, did not return repeated phone calls seeking comment.
Individuals familiar with Lehman's plans in the pass-through arena say the firm had been in the market for an additional trader for several months, and were said to be unhappy with the department's profit levels.
Cudzil is slated to trade 30-year agency pass-throughs, behind desk chief Todd White, and along with Ginnie Mae trader Glen Goldman. At Citigroup, he traded the 15-year sector. To this end, his move--and supposed pay guarantee--attracted attention because he was said to have only been given his own trading account within the last year, according to a former colleague.
Cudzil was said to have made little attempt to disguise his interest in moving from Citigroup and was in discussions with Lehman Brothers for the past several months. One individual closely familiar with both Cudzil and Lehman's situation offers a qualified defense of Cudzil: He says Cudzil is "a great young guy and will learn that it's no problem if you shop yourself to another firm, but three's a crowd."