12 CEOs Who Embarrassed Themselves Right Off Of Wall Street

Richard Fuld

Photo: AP

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.

Philip Purcell of Morgan Stanley

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.

Chuck Prince of Citigroup

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.

Stan O'Neal of Merrill Lynch

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.

Peter Wuffli of UBS

When: July 2007

Why: Major losses at one of UBS' hedge funds that ultimately led to its closure and poor earnings in comparison to other banks were the main causes of his departure. His resignation came as a complete surprise for many.

Jimmy Cayne of Bear Stearns

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.

Ken Thompson of Wachovia

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.

Fred Goodwin of RBS

When: October 2008

Why: Resigned in an agreement with the government for the bank to receive a capital injection of ~$35 billion.

Bonus: He received a ~$14 million pension as part of his resignation deal.

Dick Fuld of Lehman Brothers

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.

After Lehman: He founded Matrix Advisors in 2009, a firm that provides executive strategic counseling. In early 2012, he lost his securities licence and has no Wall Street employment.

Ken Lewis of Bank of America

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.

Oswald Gruebel of UBS

When: September 2011

Why: A London based trader lost over $2 billion dollars on unauthorised trades and was charged with fraud and false accounting. The incident made investors question UBS' risk management, and Gruebel subsequently took responsibility.

Kenichi Watanabe of Nomura

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.

Bob Diamond of Barclays

When: July 2012

Why: Barclays was fined ~$450 million by US and UK regulators after it was discovered that the bank had been manipulating interbank lending rates, specifically the LIBOR.

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