Senior Citizens Behaving Badly at Bear Stearns

The last we had heard of Jimmy Cayne, he was doing a little soul searching:

March 28th
In the past weeks, together with his wife, Patricia Cayne, who is a student of Jewish religious traditions, Mr. Cayne has spent considerable time searching for comparable events in religious history to see what lessons can be learned from the collapse of his firm, said a person who has spoken to him recently New York Times

And while Jimmy has a lifetime, and then some, to spend in purgatory, it would not be right if he did not try to drag someone down with him. That someone would be Ace Greenberg, who is none to happy to have the human pinata loitering around the office:

Mr. Greenberg wonders about Mr. Cayne’s continued presence at Bear Stearns. “I don’t understand why he comes in,” Mr. Greenberg said. “He is not employed here anymore.” New York Times

I have been a bit critical of Landon Thomas Jr.'s work on Bear Stearns over the past year, but he redeems himself with a portrait of what it is like to work at Wall Street in general, and particularly at Bear in the spring of 2008 as the firm slowly fades into history:

As for Mr. Greenberg and Mr. Cayne, their sometimes tumultuous relationship has boiled over into an outright feud — stoked by Mr. Greenberg’s claim that Mr. Cayne ignored his counsel last summer as the credit crisis hit Bear.

Cayne is already on damage control, given Ace's nearly completed book is likely to portray him in an unfavorable light:

Compounding Mr. Cayne’s ire, say people who have spoken with him, is the question of why Mr. Greenberg, who served as chairman of Bear’s risk and executive committees during the period in which the firm’s exposure to subprime mortgages hit its peak, has himself escaped censure.

Of course the funniest part of this story is the commission structure Ace charged Jimmy when he sold off his stock:

The final straw for Mr. Cayne was Mr. Greenberg’s decision to charge Mr. Cayne a commission of $77,000 for the sale of his six million shares of Bear stock, a rate far above the maximum $2,500 commission that employees pay for a single trade. Since Mr. Cayne was not an employee anymore, he did not deserve such a rate, Mr. Greenberg said. “If he doesn’t like it, he should do his future business elsewhere,” he added.

For all the people that wondered what is was like to work on Wall Street, now you now. Petty bullshit, and fragile egos.

And since everyone on Wall Street has a rabbi, and is forced to take sides, I will have to cast my vote.

Love ya, Ace.

Bear’s Family Feud: Quarrel Erupts Between the Bank’s Elder Statesmen
New York Times

Cayne Gets Religion
1440 Wall Street
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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