If you’re looking for signs that not all is well on Wall Street, you don’t need to dig deep. In the last couple of years we’ve watched the ground shifting right at the top, as bank CEOs come and go.Just this week, Nomura’s Kenichi Watanabe resigned over alleged insider trading going on at his bank.
He has plenty of company. A whopping 12 big bank executives have been held accountable for their banks’ poor or corrupt performance, and have left their position of power (h/t Here Is The City).
Not all of these once banking hotshots were kicked out, but they were smart enough to know when they weren’t wanted anymore and walked away.
When: June 2005
Why: Fellow executives and investors blamed Purcell for the bank's weak stock price and poor earnings. Critics believed that he was not leveraging the bank aggressively enough and that he should increase their exposure to profitable sub-prime mortgages. He was awarded a $113 million package for leaving.
After Morgan Stanley: In 2006, he launched Continental Investors, a private equity firm.
When: November 2007
Why: During 3Q 2007, Citi lost $6.5 billion from asset and credit write downs and warned that there could be up to $11 billion in additional write downs. Investors wanted a management change at the bank, forcing Prince to resign.
When: October 2007
Why: Following 3Q2007, Merrill revealed that it had lost $8 billion from subprime mortgages and had about $15 billion of questionable collateralized debt obligations. O'Neal stepped down about a week after the earnings announcement.
When: January 2008
Why: Cayne, who had been CEO since 1993, resigned after the bank's shares fell 50% over a year. Two of Bear's highly leveraged hedge funds also collapsed in 2007, and the bank lost most of its $40 billion in mortgage bonds. Bear sold to JPMorgan in early 2008 for less than the value of its office space.
When: June 2008
Why: Thompson purchased the home lender Golden West financial in 2006 at the height of the housing bubble for $25 billion and made several other sub-prime and consumer investments that racked up multi-billion dollar losses. After serving for 32 years, Thompson was asked to retire as stock price continued to plummet.
After Wachovia: In 2011, he joined the board of directors at BNC Bancorp of North Carolina.
When: May 2009
Why: Lehman filed for bankruptcy in September of 2008 with more than $600 billion in debt. The investment bank had been heavily leveraged and invested in the subprime mortgage business and held billions of dollars of toxic debt.
When: October 2009
Why: Following big losses from consumer loans and mortgages, and the 2008 purchases of Countrywide for $4 billion and Merrill Lynch for $19 billion, his guidance of the bank was heavily questioned.
When: July 2012
Why: Financial regulators have been investigating insider trading allegations that Nomura had had been leaking information ahead of scheduled securities offerings. Nomura officials also said that there is a significant chance that other insider trading issues are investigated. The bank's earnings have also been weak.