Wells mulls making interim CEO permanent; Emanuel joins boutique bank
Receiving Wide Coverage ...
Herbert Sandler dies
Herbert M. Sandler, who along with his wife Marion built Golden West Financial into one of California’s largest thrifts and one of the country’s biggest mortgage lenders, then sold it to Wachovia in 2006 for $24 billion just before the real estate market crashed, has died. He was 87.
The sale to Wachovia “came as housing prices were starting to fall. Many of the loans made by Golden West eventually defaulted in the housing bust of the next few years, and huge losses on those and other loans forced Wachovia to seek a rescuer, Wells Fargo, in 2008,” the Wall Street Journal reports.
“We are guilty of not predicting the future and I have never been an expert at that,” he said.
“Over their decades of ownership, the Sandlers transformed what was often described as a mom-and-pop operation — with Marion Sandler knitting during meetings — into a successful bank with 285 branches, about 11,000 employees and $124 billion in assets.” The Sandlers gave away much of their fortune to various philanthropic causes. Wall Street Journal, Washington Post, American Banker
Rahm Emanuel, the former mayor of Chicago and White House chief of staff under President Obama, will take a position at boutique investment bank Centerview Partners, where he will advise clients on merger deals and other matters. “Centerview, founded in 2006, has become one of the most profitable investment banks on Wall Street, doling out deal advice without the lending or underwriting businesses that attract regulatory scrutiny and add risk. Boutiques like it — or the even-smaller firms known as kiosks — have chipped into the leads of larger banks,” the Journal says. Former Treasury Secretary and Citigroup Chairman Robert Rubin is also an adviser there. Wall Street Journal, Financial Times
Wall Street Journal
JPMorgan is shutting down Finn, its digital banking app, just a year after rolling it out nationwide. “It is a quick about-face for a product JPMorgan hoped would help it lure new customers to its online and mobile banking options. Finn was a bit of a hybrid, offering customers a digital app loaded with features, as well as some branch access. The bank ultimately determined that Chase was best positioned to provide that combination of services to its customers, according to people familiar with the matter, rendering Finn unnecessary,” the paper says.
William Littleton, a former vice president in Goldman Sachs’ consumer and investment management division, is suing the bank for sexual discrimination, claiming that he was mistreated because he is gay. Two of his former managers have also been named in the suit. The bank called the claims baseless. “Goldman Sachs has a sustained and proven commitment to diversity, and we are proud of the vibrant and diverse LGBTQ community at the firm,” it said.
Switzerland’s competition authority fined four banks — Barclays, JPMorgan Chase, Citigroup and Royal Bank of Scotland — a total of $91 million for colluding to rig foreign exchange markets. That followed €1 billion in fines by the European Union.
Joining the Club
Mastercard executive vice chairman Ann Cairns has been named chair of the “influential” 30% Club, a group that works to get more women into top corporate jobs.
On second thought ...
Wells Fargo’s board is considering giving interim CEO Allen Parker the job permanently, Reuters reports. “The board had set a goal of hiring an outsider, with Chair Betsy Duke saying the position should attract the top talent in banking. But the external search has been complicated by concerns Wells Fargo could not pay the big dollars necessary to lure talent from competing banks. The board’s pick would also be subject to an unusual vetting by U.S. regulators.”
At the same time, “board members started warming up to the idea of keeping Parker after he made a good impression on stakeholders including regulators, investors and employees.” Parker has also “not been tainted” by the bank’s past scandals, and his past two years at the bank “have given him enough understanding of lingering problems to fix them quickly.”
“He’s obviously exceeded expectations and that’s a credit to him.” — Steven Potter, CEO of executive recruiting firm Odgers Berndtson, on Wells Fargo interim CEO Allen Parker