Bear Stearns Cos. Chief Executive Officer James ``Jimmy'' Cayne faces pressure to resign as the securities firm's shares languish following unprecedented losses from mortgage holdings coupled with a slump in trading and investment banking.
Cayne, 73, began notifying members of his board yesterday that he plans to step down as CEO and remain chairman of the New York-based company, the Wall Street Journal reported on its Web site today, citing people familiar with the matter. He's expected to be succeeded by President Alan Schwartz, 57, the paper said.
Cayne would join former Citigroup Inc. CEO Charles Prince and his counterpart at Merrill Lynch & Co., Stan O'Neal, who were forced out after the sinking value of assets tied to mortgages eroded their earnings. Bear Stearns's fourth-quarter loss of $854 million was the first in the history of the fifth- largest U.S. securities firm. The company has fallen 53 percent in New York trading in the past year, more than any of its Wall Street rivals.
Bear Stearns spokesman Russell Sherman declined to comment.
Cayne, who joined Bear Stearns in 1969 and was named CEO in 1993, faces the prospect of losing his job to a crisis his firm helped create. The company spurred last year's crash in the market for home loans to people with poor credit when two of its hedge funds, which invested in securities tied to the mortgages, collapsed in July, prompting investors to shun the debts.
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