Bloomberg News
NEW YORK The Credit Suisse Group fired Allen Wheat as head of Credit Suisse First Boston Corp. Thursday and appointed John Mack, the former president of rival Morgan Stanley Dean Witter & Co., to succeed him.
Mr. Wheat, 53, headed the investment bank for more than three years while it went through half a dozen regulatory probes on three continents.
His ouster came as U.S. regulators investigated whether CS First Boston broke securities laws when it allocated shares to investors in initial public offerings managed by the firms technology banking chief, Frank Quattrone, whom Mr. Wheat hired in 1998.
The public image of Credit Suisse was suffering as a result of the probes, and somebody has to carry the can, said Alan Webborn, an analyst at Kelton International in London.
Mr. Wheat could not be reached to comment.
Lukas Muehlemann, chairman and chief executive of Credit Suisse, said last month that the company needed to tighten controls after more than quintupling in size in four years, to 28,000 employees.
Mr. Wheat, who nine months ago engineered the $13 billion purchase of Donaldson, Lufkin & Jenrette Inc., helped transform CS First Boston into one of the worlds top sellers of stocks and bonds often by giving bankers such as Mr. Quattrone more autonomy than other securities firms allow their star performers.
In June the company fired three San Francisco-based brokers who had reported to Mr. Quattrone, after a probe of Wall Street firms and their IPO practices by the Securities and Exchange Commission, the U.S. Attorneys office, and the National Association of Securities Dealers.
CS First Bostons brushes with regulators have been mounting for some time.
In April it was suspended from trading by Indias securities regulator, which is examining whether it helped a local investor manipulate the stock market.
A month earlier a Japanese court had convicted CS First Boston and a long-time colleague of Mr. Wheat, Shinji Yamada, of violating securities rules and obstructing a government probe into derivatives transactions.
Mr. Wheat survived several upheavals and regulatory probes. In 1998 CS First Boston lost about $1.3 billion after Russias debt default and currency devaluation; in 1999 the Swedish Stock Exchange fined it $240,000 for stock market manipulation by members of its index-arbitrage team called the Flaming Ferraris for their favorite after-hours cocktail.
