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Nye Lavalle

Maybe he will give us all the pleasure of taking his own life, as many of his poor innocent victims have when his reputation and ALL the REAL dirt comes out. Especially his extra out of home activities!

Bear CEO's Handling?Of Crisis Raises Issues

Cayne on Golf Links,
10-Day Bridge Trip
Amid Summer Turmoil
By KATE KELLY
November 1, 2007

A crisis at Bear Stearns Cos. this summer came to a head in July. Two Bear hedge funds were hemorrhaging value. Investors were clamoring to get their money back. Lenders to the funds were demanding more collateral. Eventually, both funds collapsed.

During 10 critical days of this crisis -- one of the worst in the securities firm's 84-year history -- Bear's chief executive wasn't near his Wall Street office. James Cayne was playing in a bridge tournament in Nashville, Tenn., without a cellphone or an email device. In one closely watched competition, his team placed in the top third.

As Bear's fund meltdown was helping spark this year's mortgage-market and credit convulsions, Mr. Cayne at times missed key events. At a tense August conference call with investors, he left after a few opening words and listeners didn't know when he returned. In summer weeks, he typically left the office on Thursday afternoon and spent Friday at his New Jersey golf club, out of touch for stretches, according to associates and golf records. In the critical month of July, he spent 10 of the 21 workdays out of the office, either at the bridge event or golfing, according to golf, bridge and hotel records.

Mr. Cayne evidently didn't court business on the links, as some CEOs do. "The golf course for him was an escape," says John Angelo, a hedge-fund client and frequent golf partner. Another golf partner, talk-show host Maury Povich, says: "Believe it or not, many words are not exchanged about business." During the bridge event, at a time when Bear's executive committee in New York was meeting almost daily, Mr. Cayne took part by phone, then played bridge most of the afternoon.

In a short interview, Mr. Cayne declined to address his performance or his focus on Bear's summer crisis. Other Bear executives scoff at any notion that Mr. Cayne, 73 years old, isn't fully engaged. They say he reached out to clients this summer and has led by effectively delegating responsibilities to deputies.

"Anyone who thinks that Jimmy Cayne isn't fired up every day and ready to get to work hasn't been living in my world," says Alan Schwartz, Bear's president. He notes that over Labor Day weekend, Mr. Cayne flew to China to help seal a partnership with a Beijing investment bank.

Still, Mr. Cayne's actions amid the turmoil contrast with the hands-on roles of peers such as James Dimon of J.P. Morgan Chase & Co., Richard Fuld Jr. of Lehman Brothers Holdings Inc. and Lloyd Blankfein of Goldman Sachs Group Inc. In August, Messrs. Dimon and Fuld got personally involved in negotiations for new financing terms on the sale of a Home Depot Inc. unit that had lost value amid the squeeze. Mr. Blankfein canceled plans to spend the last two weeks of August at his beach house, missing a chance to spend time with his sons before they headed to college. Through the summer's market gyrations, Mr. Blankfein frequently visited Goldman mortgage desks.

The fund trouble was a shock for Bear, which was known as one of the Street's savviest risk managers. For years the firm relied on a system of "ferrets," or managers who monitored trades, to spot problems. Potential issues were reviewed in weekly meetings, at which Alan "Ace" Greenberg, the 80-year-old executive-committee chairman who led Bear until 1993, was an active participant. Nowadays, say people with knowledge of the gatherings, the firm's risk-review meetings are held more than once a week, and after years of spotty attendance, Mr. Cayne is a more-regular participant.

The tough-talking Mr. Cayne personifies Bear's aggressiveness. A onetime scrap-iron salesman, he joined Bear in 1969 and rose quickly in the brokerage division, catering to wealthy individuals. He developed a rapport with Mr. Greenberg, who shared his love of bridge, and the two frequently played after hours at the Regency Whist Club in New York. In 1993, Mr. Cayne unseated Mr. Greenberg to become Bear's CEO. Mr. Greenberg referred questions to a Bear spokeswoman.

Over the next 14 years, Bear expanded and its stock price rose nearly 600%. Mr. Cayne made some progress in turning the firm, a trading powerhouse, into more of an investment bank that helps companies with financing and mergers. Colleagues say he has been good at developing young talent, such as Chinese-born Donald Tang, who eventually became a vice chairman and chief of Bear's Asian operations.

Mr. Cayne's management style at Bear headquarters in Manhattan is to strategize in small groups in his private sixth-floor office, often wielding a lit cigar. He often seeks consensus, after consulting associates. Mr. Cayne is "a great captain" who's made a "tremendous contribution to growing a very significant franchise" over many years, says David Winters, a former chief of mutual-fund firm Franklin Mutual Advisers LLC, long one of Bear's larger institutional shareholders.

For the year 2006, Mr. Cayne took home $34 million in pay and became the first Wall Street chief to own a company stake worth more than $1 billion. Although the value of his stake has since fallen, along with Bear's share price, he remains one of the firm's single biggest investors, according to public records.

He has resisted overtures to sell Bear. In 2002, when Mr. Dimon, then head of Bank One Corp., raised the possibility of buying Bear, Mr. Cayne didn't give the idea much consideration, according to people to whom he spoke. Mr. Cayne told members of Bear's executive committee he would do a deal only for a significant stock price premium, a big personal payout and the use of a private jet, say people familiar with the conversation. The takeover idea ultimately faded away.

Mr. Cayne revels in being a Wall Street maverick. He has described his disinclination to travel for business matters, saying privately he wouldn't meet with President Bush about economic issues unless the president came to Bear's New York offices.

He is blunt. Investment-firm chief Alexandra Lebenthal brought her 11-year-old son to visit Bear a few years back. She says she introduced him to Mr. Cayne, who pulled her aside and said, "That kid's got a rotten handshake. He's going nowhere in life." Ms. Lebenthal, chief of a unit of Israel Discount Bank of New York, says she instructed her son on the importance of a firmer handshake.

Mr. Cayne, who has also used bridge to help recruit clients, considers tournaments a welcome break, say people who've spent time with him at the events. He has played in at least three so far this year, staying from a few days to over a week at each.

Attendees say Mr. Cayne has sometimes smoked marijuana at the end of the day during bridge tournaments. He also has used pot in more private settings, according to people who say they witnessed him doing so or participated with him.

After a day of bridge at a Doubletree hotel in Memphis, in 2004, Mr. Cayne invited a fellow player and a woman to smoke pot with him, according to someone who was there, and led the two to a lobby men's room where he intended to light up. The other player declined, says the person who was there, but the woman followed Mr. Cayne inside and shared a joint, to the amusement of a passerby.

Mr. Cayne denied emphatically that such an incident occurred. "There is no chance that it happened," he said. "Zero chance."

Asked more generally whether he smoked pot during bridge tournaments or on other occasions, Mr. Cayne said he would respond only "to a specific allegation," not to general questions.

Bear's travails began early this year with signs of trouble in the mortgage market. Home prices were slipping, while delinquencies on loans to the weakest borrowers, called subprime loans, were up. Late February brought a swoon in an index that tracks packages of subprime loans that have been sliced up and resold to investors in the form of complex securities.

Two Bear Stearns hedge funds -- investment partnerships for rich people and institutions -- were heavily invested in such securities. The funds used leverage, or borrowed money, to amplify their bets, magnifying both gains and losses. Reflecting their holdings, one fund was called the Bear Stearns High-Grade Structured Credit Strategies Fund. The other had the same name plus the words "Enhanced Leverage." That one had $638 million in investor cash and at least $6 billion in borrowed capital. So for every dollar of investor money, it borrowed roughly $10.

Mr. Cayne showed little sign of concern about the mortgage market at a dinner with analysts in late March, according to one attendee. But soon that market took a turn for the worse. The values of some holdings in both hedge funds sank. The more leveraged fund told its investors in early June that it was down 23% for the year through April, prompting demands by many to get their money back.

To raise cash, both funds began selling billions of dollars of the assets they'd acquired with borrowed money. All this selling put still more pressure on the values of such securities.

About this time, Mr. Cayne began his summertime ritual of taking a helicopter from New York City to Deal, N.J., on Thursdays to make a late-afternoon golf game at the exclusive Hollywood Golf Club, associates say. (He pays for the 17-minute, $1,700 trips himself, one person says.) After spending the night in his vacation home nearby, associates add, Mr. Cayne generally hits the golf course again Friday morning for another 18 holes, followed by 8 a.m. tee-offs on Saturday and Sunday. Friends say that after his Saturday game, he often heads back to his local home for several hours of online poker and bridge and to play with his grandchildren.

Samuel Molinaro Jr., Bear's chief operating and financial officer, says, "I've never had a problem reaching him."

In the first week of June, the more leveraged fund told investors who wanted out that it couldn't immediately return their money. Wall Street creditors that had lent the fund money reacted sharply to this news, making margin calls, or requests for additional collateral. One creditor, Merrill Lynch & Co., which was owed $400 million, seized the assets that backed its loan on June 15. Mr. Cayne was on the golf course in New Jersey part of that day, a Friday, having left the office Thursday afternoon, according to a Web site that tracks individuals' golf scores.

Mr. Angelo says Mr. Cayne doesn't carry a cellphone or email device while golfing, in accordance with a policy at the Hollywood club. Mr. Povich says that on Fridays, Mr. Cayne would occasionally use a land line near the course's ninth hole to check in with the office. Associates of Mr. Cayne say top Bear executives often didn't try to contact him between 8 a.m. and 1 p.m. on Fridays, preferring to leave messages with his assistants at Bear to call the office when he was free.

Even when he wasn't there in person, Mr. Cayne was hands-on, say other associates. Mortgage-division head Tom Marano, who temporarily left his post over the summer to help stabilize the two flailing funds in the firm's asset-management division, says Mr. Cayne offered some helpful advice on handling irascible creditors during a critical period in July. Mr. Marano says the CEO told him in a phone call to "keep your Irish down," or cool his temper and try to negotiate calmly. (Mr. Marano is of Irish and Italian descent.)

Late in June, as the outcry from investors in Bear's hedge funds grew, Bear authorized an 11th-hour loan of up to $3.2 billion to the less-risky of the two beleaguered funds. The fund ultimately borrowed about half that amount from its parent company.

On July 12, chatting with visitors over lunch, Mr. Cayne seemed less interested in discussing the markets than in talking about a breakfast-cereal allergy and his stash of unlabeled Cuban cigars. On another occasion, he told a visitor he pays $140 apiece for the cigars, keeping them in a humidor under his desk.

Five days later managers of both funds informed investors their holdings were virtually worthless.

The next day, July 18, Mr. Cayne left for Nashville to play in the bridge tournament, accompanied by his wife, Patricia, who is a neuropsychologist and another avid bridge player. Mr. Cayne took part in a prestigious event called Spingold KO. He was in Nashville all or parts of 10 days, according to bridge and hotel records.

For most of that time, Warren Spector -- then co-president of Bear and also a competitive bridge player -- was in Nashville as well. Mr. Spector was in charge of asset management at Bear, along with all of its trading operations and its prime-brokerage unit, which handles trades for big clients such as hedge funds as well as lending them money.

Amid the hedge-fund crisis, Bear's five-member executive committee gathered almost daily. Mr. Cayne and Mr. Spector dialed in from Nashville in the hours before the afternoon games began.

On the calls, Mr. Cayne rarely dictated orders, participants say. When fingers were pointed, he urged others not to "worry about who got us here."

The funds reached an impasse on July 26. Fretting over a margin call that hadn't been met, Bear took the painful step of seizing most of the remaining collateral in the less-leveraged fund, to which Bear had extended $1.6 billion in credit. Although the fund had paid back $300 million of the loan, it couldn't come up with any more cash, essentially forcing its own parent company to shut it down. Days later, Mr. Marano, who had been unable to avert the seizure, initiated bankruptcy proceedings for both funds.

The following day, Mr. Cayne left Nashville to return to New York. By then, new troubles were brewing at Bear Stearns Asset Management, the umbrella division for the two troubled hedge funds. Another, unrelated fund was also facing investor demands for their money back.

Amid the turmoil, Mr. Cayne on Aug. 1 called in Mr. Spector, the co-president who had been with him at Nashville. Mr. Cayne was annoyed that Mr. Spector had been away from the office during the fund crisis, according to people familiar with his thinking. He told Mr. Spector he had lost Mr. Cayne's confidence and should resign, these people say. Mr. Spector left his boss's office without committing to do so.

On Friday, Aug. 3, with investors in Bear's stock worried about how solid its financing was, executives convened a conference call to reassure people. Mr. Cayne opened it by saying the firm was "taking the situation seriously" and addressing the market issues. He turned over the call to Mr. Molinaro, the CFO. Mr. Molinaro called the bond market's condition "about as bad as I've seen it" in a 22-year career.

An analyst asked Mr. Cayne a question, but there was silence. Mr. Cayne had left, say two people who were with him in a Bear conference room at the start of the call. One says Mr. Cayne had been summoned out by a lawyer advising him on the pending departure of Mr. Spector, who by then was planning to resign. Mr. Cayne later returned, but the hundreds of listeners weren't told this, leaving them with the impression that the CEO had left the call altogether.

As word spread about the call and Mr. Molinaro's grim assessment, the financial markets began to sink. The Dow Jones Industrial Average fell more than 300 points, before recovering slightly to end the day down 2%.

Later that day, WSJ.com reported the anticipated resignation of Mr. Spector. The co-president, a 49-year-old former mortgage trader, had been seen as a likely heir to Mr. Cayne. The move left Bear with no apparent succession plan, though in a recent interview Bear's lead director, Vincent Tese, said that "the front-runner is clearly Alan," meaning Mr. Schwartz.

The following day, a Saturday, Mr. Cayne scored a respectable 88 at the Hollywood golf course, according to the golf Web site. But for Bear, things seemed to be falling apart that weekend. Major clients of the firm's prime brokerage division were threatening to pull their business.

Bear executives scrambled to reassure them in phone calls Sunday, Aug. 5, saying that Bear's financing was secure and its risks contained. Yet Bear did lose some prime-brokerage business -- from, among others, Brahman Capital Corp. and a fund connected to Mariner Investment Group, say people familiar with the matter.

Although Mr. Cayne didn't take part in the Aug. 5 calls to clients, according to people familiar with the calls, he spent a rare Sunday at the office leading a hastily called board meeting to accept Mr. Spector's resignation.
Late the Friday of Labor Day weekend, Mr. Cayne flew to Beijing with Mr. Tang, the Chinese-born executive, for a series of meetings that would culminate in a deal.

On Sept. 20, Bear reported earnings for its Aug. 31 quarter: a 61% year-over-year drop -- reflecting an 88% fall in bond revenue and $200 million in costs linked to the closing of the two hedge funds. Bear shook up its mortgage unit, laying off more than 500 people. It has just laid off 300 more people throughout the firm, though the head count remains at about 15,000.

Bear faces reviews of the hedge-fund collapses by the Securities and Exchange Commission, the Justice Department and Massachusetts state regulators. Bear's board has retained attorney Robert Fiske Jr. to sort out what went wrong. On Oct. 22, Bear and Citic Securities Co., a Chinese investment bank, announced a deal in which each will invest about $1 billion in the other. In sealing that deal, Mr. Cayne's long-term relationship with the Chinese bank's officials "had gone a long way," says Mr. Tang. Bear's stock edged up on the news but remains down about 30% for the year, the worst performance of any major brokerage firm.

Bear's travails have of late taken a back seat to those of competitors like Merrill Lynch, where a write-down of $8.4 billion cost chief executive Stan O'Neal his job. Many of Bear's rivals continue to grapple with the fallout of the summer's credit crunch, and when conditions will improve remains unclear.

Friends of Mr. Cayne say he is troubled by the summer's events and concerned about his legacy. "It's one thing if you're 55," says Mr. Angelo, the hedge-fund manager and golf partner. "It's another if you're 73," he says, adding that amid turmoil such as this year's, it can take "periods of time to get your reputation back."

http://www.financialnews-us.com/index.cfm?page=ushome&contentid=2449093104 

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Hotel employee
I'm a female employee w/ Doubletree . On several occassions Mr. Cayne's personal enjoyment does not stop with just pot smoking , and yes i have had the pleasure to accompany him to his private suite at the hotel . There we would enjoy the next several hours of pleasure . We would smoke some really good marijuana , then feeling high , he engaged in hours of sexual  relations and positions with me . I would have to say he is a very caring guy , always sincere with me . On every occassion he always gave me a beautiful gift when we departed .
   so , what ,  if the mans laundry is not all clean .  you people make a big deal out of nothing .  I'm from mexico and this kind of stuff goes on all the time . enjoy today , because you don't know what tomorrow brings . 
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Hey Mods? Could you compare the above post to others made recently and see if anything matches up?

To Mike:  We checked the above post and it is legitimate, although suspicious as to its content.
 
Forum Moderators
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Who?
This looks like a fake posting?

Hotel employee wrote:
I'm a female employee w/ Doubletree . On several occassions Mr. Cayne's personal enjoyment does not stop with just pot smoking , and yes i have had the pleasure to accompany him to his private suite at the hotel . There we would enjoy the next several hours of pleasure . We would smoke some really good marijuana , then feeling high , he engaged in hours of sexual  relations and positions with me . I would have to say he is a very caring guy , always sincere with me . On every occassion he always gave me a beautiful gift when we departed .
   so , what ,  if the mans laundry is not all clean .  you people make a big deal out of nothing .  I'm from mexico and this kind of stuff goes on all the time . enjoy today , because you don't know what tomorrow brings . 

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Being compelled to shed light on these allegations, I too must state that this individual, his company, his lawyers did on multiple occassions forcibly engage in inappropriate conduct and unsavory fraudulent acts with me, against my will over clear and documented protest in full public view at various courtrooms over a period of nearly 10 years.  There are thousands more, many here, who have suffered similarly and worse under this perpetrator's willful, knowing direction and inappropriate behavior.  Mr. Cayne needs to think twice about counting his victims into BS record of success over the 14 years he's been at the helm because they are coming home in droves to roost!

 

 

http://www.bloomberg.com/apps/news?pid=20601087&sid=aTJiJOk1wXAY&refer=home


Bear's Cayne Denies `Inappropriate Conduct' After WSJ Article

By Yalman Onaran

Nov. 1 (Bloomberg) -- Bear Stearns Cos. Chief Executive Officer James ``Jimmy'' Cayne denied that he ``engaged in inappropriate conduct'' and said he remained ``intensely focused'' on the firm.

Cayne's comments, made in an internal memo sent to employees, came after the Wall Street Journal, in a front page story earlier today, cited unidentified people as saying he smoked pot at bridge tournaments. The story also said Cayne, 73, spent 10 of 21 working days in July outside the office while two of the company's hedge funds collapsed.

``I stand by the record of success the firm has had over the 14 years that I have had the privilege of leading this great organization,'' Cayne said in the memo. ``Thank you for your continued dedication to Bear Stearns, and don't be distracted by the noise. I am certainly not.''

The collapse of the market for securities linked to subprime mortgages in July sparked the worst credit markets since Russia's debt default in 1998. Earnings at New York-based Bear Stearns, the No. 2 underwriter of bonds backed by mortgages after Lehman Brothers Holdings Inc., dropped 61 percent, the biggest decline in more than a decade. The company has cut 900 jobs, or about 6 percent of its workforce.

Bear Stearns fell 3.4 percent to $109.74 in New York Stock Exchange Composite trading. The stock has dropped 30 percent this year, the worst performance among the five biggest securities firms, Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co. and Lehman. All are based in New York.

Bear Stearns spokeswoman Elizabeth Ventura confirmed the contents of the memo and declined to comment further. Cayne wasn't available for comment.

Cayne ousted Co-President Warren Spector in August, holding him responsible for the hedge-fund losses. Spector, 49, was considered a potential successor to Cayne.

To contact the reporter on this story: Yalman Onaran in New York at yonaran@bloomberg.net .

Last Updated: November 1, 2007 10:17 EDT


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anon2
This is too funny.

I am with you Blossom. All ways to next Sunday. Ways I couldn't even imagine.

The worst thing this guy did was smoke pot? Not defraud millions? Steal peoples homes out from under them? What is this? reefer madness? Didn't Rupert Murdock buy out the Wall Street Journal? And they say their editorial content didn't suffer. Lets really focus on something that isn't important.
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Nye Lavalle
Rumor has it, former execs that were dismissed and laid off, turned the scum bag in and are sending docs and even cell phone videos to reporters. Stay tuned!
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4 justice now
Anon2:

I maybe mistaken, but it sure sounds as though he's done much worse than simply smoking a little weed now and then. 

After all Greed is almost always the common denominator when it comes to these scumbags.


My Opinion.

R,

4J
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anon2

My point exactly. This guy stole millions of dollars, defrauded people out of their homes and the worst that can be said is he smoked pot? He sounds more like a coke head than a pot head imho.

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I have to laugh at this guy.

He runs the scam.

Stuck it to investors.
Stuck it borrowers.

Stuck it to his business.

he was out fiddling while Rome was burning.

He had no cares in the world while playing bridge and long golfing dates.

If the investors don't string him up I'll be surprised.

He already got his money. 

Here's hoping someone relieves him from the awesome duty of protecting his vast fortune and his huge houses, boats, jets or whatever perks he got.

Dee
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4 justice now
Anon2:

I apologize, for some reason I missed your sarcasm the first time around. I really should have known better.


R,

4J
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Cayne's Up In Smoke Over High Finance
Nov. 2, 2007
Very funny NY Post photo montage!
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Nye Lavalle
What a f u ing joke for an excuse of an executive, let alone less than human being. He's a punk that's going to get his due soon!
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4 justice now
Nye,

If there's even an once of pride left in the American "big business" work ethic he'll be gone before the lights go out.  And we can only hope that he'll take many others with him.

I couldn't care less about the pot smoking, but the guy is a greedy piece of excrement that should be flushed.


My Opinion.

4J
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Nye Lavalle
My sources were right it seems! It's good to be on the good and light side of this story and the press...

The Jimmy Cayne Takedown
November 1, 2007, 8:30 am
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Bear Stearns chief executive James Cayne is apt to be the talk of Wall Street on Thursday, as industry insiders gape over a long, unflattering and at times highly gossipy profile of him in The Wall Street Journal. The account, which tops 3,000 words and makes repeated use of unnamed sources, portrays him as an out-of-touch leader with a penchant for pot smoking who is more interested in his bridge and golf games than tending to his firm’s recent crises.

Already, Wall Street denizens are speculating about whether Mr. Cayne’s former lieutenant and fellow bridge enthusiast, Warren Spector, might have had a hand in the story.

The Journal article leads with an account of 10 days in July that Mr. Cayne spent at a bridge tournament in Nashville, Tenn., even as two of Bear’s hedge funds were staggering toward what would eventually become twin bankruptcy filings. He was “without a cellphone or an email device” during the trip, the Journal said.

The article also said he sometimes caps a day of bridge with a joint, including during a trip to Memphis in 2004. In a short interview with the Journal, Mr. Cayne wouldn’t address general questions about pot smoking but said there was “zero chance” that the story about the Memphis trip was true.

Mr. Cayne’s weekly golf outings in New Jersey over the summer — a period of extreme turmoil at his firm — have been widely reported. Bear Stearns maintains that he is in contact with the office while off site, something that Samuel Molinaro Jr., Bear’s chief operating and financial officer, repeated in Thursday’s profile: “I’ve never had a problem reaching him,” he told the Journal.

Mr. Cayne has other defenders in the article, including David Winters, a former chief of the mutual-fund firm Franklin Mutual Advisers, who calls him a “great captain.” It also points out that Mr. Cayne traveled to China over the Labor Day weekend to help seal a partnership with a Beijing investment bank.
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