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Thread: Wall Street Executives from the Financial Crisis of 2008: Where Are They Now?

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    Wall Street Executives from the Financial Crisis of 2008: Where Are They Now?

    Vomit inducing article about where the Wall Street Crooks are now.

    The Wrecking Crew
    April 2015

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    GONE GUYS: Countrywide’s Angelo Mozilo, Merrill Lynch’s Stan O’Neal, Bank of America’s Ken Lewis, Merrill’s John Thain, Bear Stearns’s Jimmy Cayne, and Lehman Brothers’ Dick Fuld.

    It’s been nearly seven years since a financial meltdown almost destroyed the global economy. Some of Wall Street’s major players reflect on riding out the maelstrom.

    by William D. Cohan

    Once upon a time, Jimmy Cayne, now 81, had a lot to say about the sad fate that befell Bear Stearns, the Wall Street investment bank he ran for nearly 15 years before its shocking collapse, in March 2008. In more than 20 hours of interviews with me that summer, portions of which later appeared in my book House of Cards, he blamed Wall Street competitors and an amorphous group of hedge funds for conspiring to take down the 85-year-old firm. He was especially angry about then New York Federal Reserve Bank president Tim Geithner’s decision to allow Bear’s competitors access to crucial Federal Reserve funding, permitting them to fight another day, while his firm was denied such funds and faced the choice of either filing for bankruptcy or being sold to JPMorgan Chase for a pittance (which is what happened). Smoking $150 Cuban cigars, obtained through secret sources in Lebanon, he fumed, “The audacity of that prick in front of the American people announcing he was deciding whether or not a firm of this stature was good enough to get a loan…. It’s just that for some clerk to make a decision based on what, your own personal feeling about whether or not they’re a good credit [risk]? Who the **** asked you? You’re not an elected officer. You’re a clerk. Believe me, you’re a clerk.”

    That was then. These days, Cayne isn’t talking. Neither he nor his attorney Melissa Prober, at Kramer Levin, responded to requests to speak about the financial crisis for this article. But Cayne is still around. He continues to be a force in the world of contract bridge. Last October, he competed in (but did not win) the 15-day Red Bull World Bridge Series, in China. In November he and his wife, Patricia, posed for photographers at the Children’s Cancer and Blood Foundation Breakthrough Ball Benefit Gala, at the Plaza Hotel. The event was conveniently located for them: upstairs, on the 14th floor, was the couple’s 6,000-square-foot apartment, which they bought for $28.24 million a month before Bear Stearns imploded.

    Even though Cayne lost around $1 billion when the value of his Bear Stearns stock fell to around $2 a share in the days after the March 15 agreement to sell to JPMorgan Chase, he was able to sell it all a few weeks later for around $61 million after JPMorgan was forced to increase the price of the deal to $10 a share. “The only people [who] are going to suffer are my heirs, not me,” he told me back then. “Because when you have a billion six and you lose a billion, you’re not exactly, like, crippled, right?” He told me his net worth was then around $400 million, although some people wonder if that may be a bit of an exaggeration, in keeping with Cayne’s general flamboyance. In addition to the Plaza apartment and his huge beach house, in New Jersey, he also owns a sixth-floor condominium at the posh Boca Beach Club, in Boca Raton, Florida, for which he reportedly paid $2.75 million in 2010, through a trust bearing the name Legion Holdings III, according to the Web site Gossip Extra.

    Last December, Cayne sat for a deposition in a lawsuit brought by Bruce S. Sherman, an angry former C.E.O. of a Florida-based hedge fund, which lost approximately $500 million when Bear Stearns collapsed. According to a person familiar with the conversation, Cayne’s recollection of the meltdown has become cloudy. Some say he is just being cagey; others say he is a little out of it, a combination of getting older and spending too much time far from the Wall Street action that was once his lifeblood. He no longer remembers anything about the adequacy of Bear’s risk models. He no longer admits to having had anything to do with the decision to close down the two problematic Bear Stearns hedge funds that had disastrously invested in subprime mortgages. He doesn’t remember being notified about problems on Bear’s trading desk, or about Bear’s inability to obtain financing from the market, or the billions of dollars of lethal mortgage-backed securities on its balance sheet. In public, anyway, he has become a jovial but forgetful old man who knows that any payments to Sherman will be coming out of JPMorgan Chase’s shareholders’ pockets, not his own. “He’s just kind of sad” these days, a longtime friend of his told me.

    Cayne is not alone among former Wall Street executives in preferring not to revisit the events of 2008. Stan O’Neal, the former chairman and C.E.O. of Merrill Lynch & Co., contacted through a friend, doesn’t want to talk about that time, either. In the years leading up to the crisis—he resigned under fire in October 2007—O’Neal was the person, many people at Merrill believe, chiefly responsible for ratcheting up the firm’s risktaking, allowing its balance sheet to get larded with squirrelly debt securities, just as savvier firms such as Goldman Sachs and JPMorgan Chase were aggressively de-risking their balance sheets. He is said to feel “bitter” about the way he was treated by the press before and after Merrill’s collapse. But he isn’t nursing his wounds on the breadline.

    O’Neal left Merrill with a severance package of around $161.5 million, on top of his 2006 pay of $91.4 million. It is not exactly clear what he does these days, other than serve on the board of directors of Alcoa. He doesn’t much keep in touch with his old friends, and he has moved from his Park Avenue apartment to the Upper West Side of Manhattan. “He seems to have retreated from the world,” a friend says.

    John Thain, a former partner at Goldman Sachs and onetime C.E.O. of the New York Stock Exchange, got a $15 million signing bonus to replace O’Neal as the C.E.O. of Merrill in January 2008. Thain then steered Merrill to its inevitable demise, in September 2008, when Bank of America bought it for $50 billion in stock, thanks to a major financial assist from the federal government. Thain, too, declined to be interviewed for this piece. Since February 2010, he has been the chairman and C.E.O. of CIT Group, a middle-market lender. His total compensation from CIT in 2013 was $8.25 million and his approximately 350,000 shares of CIT stock are worth around $16 million.

    Read More, but have a barf bag ready.

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