Bear Stearns is Preparing to Oust President: WSJ
Bear Stearns is preparing to oust Warren Spector, one of its two presidents and its co-chief operating officer, the Wall Street Journal reported on Saturday.
A Bear Stearns Bear Stearns Co spokesman did not immediately return a phone call seeking comment.
Bear Stearns' board is due to meet on Monday to consider the departure of Spector, who heads up its stock and bond trading operations, the paper said, citing a person familiar with the situation.
Spector, 49, had widely been seen as a candidate to become the firm's next chief executive, the Journal said.
Spector, who has been at the firm since 1983, oversees Bear's entire capital markets business, which includes monitoring stock and bond trading, the paper said.
Although he has taken a public role at the firm in the past, making presentations to analysts and investors on at least two occasions earlier this year, Spector did not participate in a conference call Bear Stearns held on Friday.
The call was hastily scheduled after S&P changed its rating outlook on Bear Stearns to "negative" from "stable," flagging a greater chance of a credit downgrade in the next two years.
While it was aimed at soothing investors' fears, the call, featuring chief financial officer Sam Molinaro, and, briefly, chief executive James Cayne, seemed to exacerbate them as Molinaro said the firm faced the most difficult debt markets in more than two decades.
Bear Stearns stock closed $6.78 lower at $108.85, having dropped as much as 7.9% to its lowest since November 2005. That was its worst intraday drop since September 17, 2001, the first day of trading after the September 11 attacks.
Bear has struggled with redemptions at three hedge funds investing in repackaged mortgages. Two made bad investments in bonds linked to subprime mortgages, or high-interest loans to people with poor credit, a sector where defaults have surged.
Copyright 2007 Reuters Limited.
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