Phone Logs Cited at Insider-Trading Trial
NEW YORK - Former Keefe, Bruyette & Woods Inc. chief executive James McDermott leaked confidential information about a pending bank merger just 45 minutes after he had learned of the deal, prosecutors said Monday in opening statements at his insider-trading trial.Assistant U.S. Attorney Alex Oh said telephone records show that McDermott called Kathryn Gannon within minutes of learning from a bank executive that the bank would be bought out.
"Thirteen minutes after she hung up the phone with James McDermott," Ms. Gannon "picked up the phone again and called her broker" and bought stock in Central Fidelity, Mr. Oh said.
Mr. McDermott is accused of passing proprietary information about six pending bank mergers to Ms. Gannon, who has appeared in adult films and is believed to have been romantically involved with Mr. McDermott. Ms. Gannon has been charged but is believed to be a fugitive in her native Canada.
- Bloomberg News
Visa Emerging-Markets VP Is Promoted
SAN FRANCISCO - Paul Vessey, who joined Visa U.S.A. in February as executive vice president for emerging markets and technologies, has been promoted to chief operating officer, the association announced Monday.Visa said Mr. Vessey will continue his work with emerging markets and technology and will also oversee product management and development, transaction processing, risk management, and other operational functions. He succeeds Bruce Wheeler, who recently resigned as chief financial officer, according to Visa.
Before joining Visa, Mr. Vessey was a senior executive vice president at Canadian Imperial Bank of Commerce, where he was in charge of card products, payment products, and insurance. He is a former chairman of Visa Canada and former vice chairman of Visa International.
- Jennifer Kingson Bloom
Green Tree Woes Put Conseco CEO on Spot
CARMEL, Ind. - Conseco Inc. chairman and chief executive Stephen C. Hilbert, who founded the insurance company 21 years ago, is battling to convince investors that he should keep his job.The company's shares lost 48%, or $2.1 billion of market value, in the week after the March 31 announcement that it planned to sell - probably at a loss - its consumer finance division, the former Green Tree Financial Corp.
Conseco also warned of a $350 million charge against 1999 profit, because it had overestimated the value of Green Tree assets. The news came less than a month after Mr. Hilbert, 54, cited Conseco's "healthy operating performance trends" and endorsed analyst earnings forecasts. Mr. Hilbert declined requests to be interviewed.
"Investors want somebody's hide. Somebody ultimately has to be responsible when such a large screw-up happens," said Patrick McGurn, a money management adviser for Institutional Shareholder Services in Rockville, Md.
Last week shareholders filed a class action in U.S. District Court in Indianapolis claiming that Mr. Hilbert and chief financial officer Rollin Dick made misleading statements about Green Tree. Conseco denied the allegations Friday.
- Bloomberg News
Chase Among Top Banks in Web Venture
LONDON - Chase Manhattan Corp., the world's largest trader of interest rate derivative contracts, and five other major banking companies said they are starting an Internet venture that will cut costs in the $52 trillion swaps market.The SwapsWire service is to be equally owned by Chase, Citigroup Inc., Deutsche Bank AG, J.P. Morgan & Co., Morgan Stanley Dean Witter & Co., and Warburg Dillon Read, a unit of UBS AG. SwapsWire is expected to be tested this year and to become available to customers by the first quarter of 2001, Chase said.
The companies say the venture will lower the costs of writing and trading benchmark swaps and other interest rate derivatives by using online processing and standard contracts.