Jimmy Cayne apologised for the first time to Bear Stearns shareholders and employees on Thursday as the investment bank he helped build into a scrappy powerhouse formally disappeared into Wall Street history as the biggest victim of the credit crisis.
Mr Cayne’s comments, made before a packed auditorium at Bear headquarters, came as shareholders approved the sale of the bank to JPMorgan Chase for $10 a share, or $2.2bn. Bear traded above $150 a share as recently as a year ago.
“I just want to personally apologise for what has happened,” Mr Cayne, 74, said at a meeting that lasted less than 10 minutes. “We just ran into our own hurricane.”
He was referring to a crisis of confidence that slammed Bear in March, leading clients to flee and lenders to pull the overnight funding on which the bank had become so dependent.
The crisis pushed Bear to the brink of bankruptcy before the Federal Reserve and other regulators stepped in to help broker the sale to JPMorgan for an initial price of $2 per share. JPMorgan later lifted the offer to $10 after an outcry from Bear shareholders.
Bear employees and shareholders on Thursday were not sympathetic to the run-on-the-bank argument, contending that the company could have moved sooner to raise capital and reduce its reliance on borrowed money.
“This did not need to happen and a lot of people lost all they had,” said one Bear trader, smoking a cigarette on the street after the meeting ended.
The trader, who declined to give his name, said he was happy to still have his job even as JPMorgan cuts the vast bulk of Bear‘s former workforce of 14,000. “Maybe they will come in here and really clean this place up,” he said.
Wayne Kaniper, a Bear shareholder from New Jersey, said he was dissatisfied with the meeting. “I’m disappointed because they did not give people the chance to ask any questions,” he said. “I’m also concerned that a big American company like this could just collapse based on bad judgement.”
A caricature painting of Mr Cayne that sits outside the bank’s front door and features comments from dozens of Bear employees had blunter messages for their long-time chief executive and chairman.
“You screwed us Jimmy,” read one comment scrawled at the top of the painting.
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