'The Most Hated Guy On Wall Street': The Unspoken Story of Trump's Pick For Commerce Secretary

Forbes

Having rebuilt his firm after losing hundreds of employees, and his brother, on 9/11, Howard Lutnick should be one of the most respected CEOs in America. Why do so many people despise him?  Read the full story on Forbes: https://www.forbes.com/sites/danalexander/2024/11/20/the-most-hated-guy-on-wall-street-the-unspoken-story-around-howard-lutnick-trumps-pick-for-commerce-secretary/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, the most hated guy on Wall Street.

00:04The unspoken story around Howard Lutnick, Trump's pick for Commerce Secretary.

00:11On the morning of July 27th, Cantor Fitzgerald's longtime CEO, Howard Lutnick, took the stage

00:17at Bitcoin 2024 in Nashville, Tennessee, where thousands of crypto fanatics had gathered

00:22to listen to royalty from the MAGA universe, including Vivek Ramaswamy, Robert F. Kennedy

00:28Jr. and Donald Trump himself.

00:31During Lutnick's 20-minute talk, the burly, balding 63-year-old made an impassioned defense

00:36of Tether, a cryptocurrency attached to the U.S. dollar, and announced the launch of an

00:41initial $2 billion financing business to provide leverage to Bitcoin investors.

00:47But before he began proselytizing, he retold a familiar story.

00:51On September 11th, 2001, he was dropping off his oldest son on his first day of kindergarten,

00:57when a plane struck the World Trade Center, where Cantor Fitzgerald's headquarters sat

01:02on the 101st to 105th floors.

01:05All 658 of his employees in the building that morning were killed, including Lutnick's

01:11brother, Gary, his best friend, Doug, 28 sets of brothers and one set of sisters.

01:17Describing the close-knit workplace, Lutnick recalled his hiring strategy, saying, quote,

01:22We had an unusual model.

01:24We only wanted to work with people that we liked.

01:27Out of tragedy came purpose.

01:30Lutnick promised to give 25 percent of the firm's profits to families of the deceased

01:34for five years, eventually shelling out $180 million.

01:40Twenty-three years later, Lutnick still sees himself as a model of patriotism and determination.

01:46Many others do, too.

01:48When Trump announced Lutnick's nomination as Commerce Secretary on Truth Social on Tuesday,

01:52he did not focus on his business acumen or trade policy knowledge.

01:56Instead, Trump mostly recounted the 9-11 events and described Lutnick as a, quote,

02:01inspiration to the world and, quote, the embodiment of resilience in the face of unspeakable tragedy.

02:09It's a true and undoubtedly inspirational story.

02:13But Lutnick has a darker side, which emerges in court documents and conversations with

02:17people who have done business with him.

02:20For years, they say, he and his firm have been pulling money from people, clients, investors,

02:25and colleagues, making Lutnick, according to one former partner, quote, the most hated

02:31guy on Wall Street.

02:33His multibillion-dollar empire, which includes two publicly traded companies and a privately

02:38held investment bank, is a tangle of self-dealing, with record-keeping issues that date back

02:43decades and infighting that continues to the present day.

02:47Another former employee says, using an expletive, quote,

02:50The whole firm is about effing people.

02:53It's about squeezing people.

02:56Lutnick runs his firm through a partnership, but there is no doubt who has the ultimate

02:59say.

03:01Now worth more than $1.5 billion, Lutnick pays himself like a king, cutting into partnership

03:07profits.

03:08A former partner says, quote, he could do what he wanted.

03:13According to a lawsuit filed last year in federal court, Lutnick made employees take

03:1710-20% of their pay in partnership units, which sounded nice, but caused problems when

03:22the employees tried to get their money out.

03:25Agreements allegedly gave Lutnick sole authority to stiff former partners whom he believed

03:30violated broadly defined non-compete provisions.

03:34An estimated 40% did not end up with all their money after departing, according to the lawsuit,

03:39which says it was all part of a scheme to fool employees and enrich Lutnick.

03:44Another former colleague says, quote, he only pays if he wants to pay you.

03:50Lutnick's companies have moved to dismiss the suit.

03:53Through a spokesperson, Lutnick declined to be interviewed for the story.

03:56He does have defenders, who suggest some people just aren't tough enough to handle him, or

04:01smart enough to read through the partnership agreements that one executive estimates run

04:05700 pages.

04:07Even those who support Lutnick, however, aren't eager to share their thoughts on the record.

04:12A former colleague says, quote, people are very scared of him.

04:16I witnessed this stuff firsthand.

04:18I witnessed the bullying.

04:19I witnessed the aggression.

04:22For full coverage, check out Dan Alexander's piece on Forbes.com.

04:28This is Kieran Meadows from Forbes.

04:30Thanks for tuning in.

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