At his plea hearing last month, Mr. Davis said he knew that his actions were “wrong and unlawful” but otherwise shed little light on why he turned to insider trading. But clearly, he needed money, despite his years of bonuses as a highly paid investment banker and his lucrative directors’ fees.
According to the S.E.C.’s complaint, by April 2010 Mr. Davis was in “desperate” financial straits. He owed the I.R.S. $78,000. His brokerage account was heavily margined, and he had run up tens of thousands in credit card debt. He owed $550,000 to one of his investment funds.
.. As Professor Coffee put it, “This is a perfect example of a favor bank, which is exactly how Wall Street works.”
.. In just one month, March 2011, Mr. Davis ran up gambling losses of $200,000 at one Las Vegas casino. He owed $178,000 for the private jet. And he had to cover the $100,000 he had taken from the charity.
.. The government has shed little light on Mr. Davis’s motive, other than that he needed money. The S.E.C. said he did little to adjust his expensive lifestyle after leaving Credit Suisse in 2001. He experienced a sharp drop in his income, went through an expensive divorce soon after and suffered big investment reversals during the 2008 financial crisis.
.. Mr. Davis is hardly alone in trying to maintain the illusion of wealth and prosperity even as his personal finances veered out of control.