Bear Stearns' Cayne Sells Once-$1 Billion Stake For $61 Million

NEW YORK — Bear Stearns Cos. Chairman James Cayne dumped his entire stake in the embattled investment bank for $61 million as it appears closer to a takeover by JPMorgan Chase & Co.

Cayne sold 5.66 million shares for exactly $10.84 a share on March 25, according to a filing with the Securities and Exchange Commission. His stake was once valued at about $1 billion when the stock was trading at $171.50 per share.

The filing was disclosed Thursday.

His stake at one point plunged to about $27 million when JPMorgan announced nearly two weeks ago it would acquire the No. 5 U.S. investment bank for $2 per share. JPMorgan later upped that offer to $10 per share, and agreed to acquire 39.5 percent of the company without a shareholder vote to block any rival offers.

On Thursday, Bear Stearns Chief Executive Alan Schwartz said in a letter filed to the SEC that the company will issue 95 million shares to JPMorgan within the next 10 days as part of the takeover deal. He said the latest agreement was "essential to maintaining the company's financial stability."

In addition, Schwartz said Bear Stearns is able to bypass shareholder approval because "securing stockholder approval would seriously jeopardize the financial viability" of the company. About one-third of the company's shares are owned by Bear Stearns' 14,000 employees.

Cayne, who serves as non-executive chairman, was said to be unhappy about the deal struck to sell the company he worked at for most of his life. He served as chief executive for 15 years until January, when he stepped down after Bear Stearns announced its first loss since being founded 85 years ago.

There has been some speculation that Cayne might join forces with Joseph Lewis, a billionaire financier who owns about 12 percent of the company. Lewis has expressed his interest in blocking a deal many considered to be hastily arranged, and one which severely undervalues Bear Stearns.

Both have recently tried to recruit investors to counter the JPMorgan offer, according to a report in the New York Post last week.

A spokesman for Lewis could not be reached for comment. And, spokesmen for JPMorgan and Bear Stearns declined to comment.

Bear Stearns shares rose 2 cents to $11.23 in trading Thursday. However, the stock fell more than 5 percent in after-hours trading. JPMorgan shares fell $1.25 to $42.86.

Comments

[deke33]

How could this be? The thieves that caused a company to go bellyup are still raping the very people they stole from even after they caused the financial disasters. Whatever happened to the MORAL HAZARD DOCTRINE that says the poor must pay a copay for medical services amd medications. The poor who go bankrupt must still pay something for going bankrupt. Yet, those that cause companies to become financial disasters receive retirement bonuses, retirement pay, resignation payment in the millions and hundreds of millions and are still allowed to reap further benefits even after their failure has been exposed. Pray tell, where is the MORAL HAZARD DOCTRINE for those culprits. They should be placed behind bars.

[partyofone]

One more example of a compliant administration and Congress. Why isn't this guy broke, having run a major financial insitutition into the ground with irrepsonsible business practices? Why isn't he being prosecuted? Hang on, Bush-McCain-Clinton, it's more of the same with no reform in sight.

[Novista]

Umm, just wondering how all the financial experts here KNOW that Bear Stearns was truly wrecked? I mean, more so than, say, Lehman Bros? Or don't you have TinFoilHats?

I put mine on every time I see the Morgan brand, and I know I will never be disappointed that they are screwing untold numbers of people. Or did it never occur to you that JPMC and the Fed in collusion were running a scam on you?!

Consider, 38% of shares owned by employes, and 9.x% by Joe Lewis ... and the first $2/share offer tanks against a building woth a billion. And BS shares still trading after that weekend 'offer'. Now, a 're-evaluation', yeah. But rest assured, no tax dollars were injured in the making of this travesty.

[WIpatriot]

They just KNOW, that's all, Novista. Trust them...B-S didn't even ASK for help, it just came.

[jules135]

Not right! He needs to give at least a third of it to his former employees who had 1/3 ownership of the company and have now lost everything. And if he doesn't -- HE NEEDS TO GO TO PRISON.

[deke33]

All hus assets need to be legally confiscated and shared with the very people he raped. And yes he needs to go to jail.

[kvass]

Take heart -- the old bugger can't take it with him.

[Purple Girl]

We know - so we plan to take it OUT of his Will First.
Same goes for all those Descendant of the Other Criminals who high jacked the 20th Century- Morgan Rockefellars..... Cough Up what YOU Owe US! Or be tried as co Conspirators!

[professormoriarty]

Poor Boo Boo. I bet this is half of what it was worth last week.

I weep for him.

[rixhex56]

So, this guy walks away with all this money after running the company into the ground, and then the public taxpayers foot the bill to bail them out? How much jail time? WTF?! This country is lost.

[fignozzle]

i KNOW!
WTF!!!!!!!!!!!!!!

[javagirl322]

It's just not fair...but this is what our country has come to...

[postedby]

How are the public taxpayer footing the bill?

[Boboday555]

A government that finances private companies?
I hate to break this to all you policoes on the far right but, that's COMMUNISM kiddies.

[Boboday555]

New Rule:
If your company goes under, you go broke!
No more will CEOs rape and pillage then walk away scott free.

Let me see if I can get this right:
"And, if you don't like it exectutives, you can alwasy move to another country!"

How'd I do BUSHIES?
That argumemt is usually your stock and trade but I thought I'd give it a whirl.

[Boboday555]

I'm glad Mr. Cayne is gonna' be fine.
I was so worried about him!
Never mind the 'little people' who invested in his fraudulent company and lost their entire life savings....I'm just glad this multi-millionaire crook made out okay.

"It is easier for a camel to fit through the eye of a needle than it is for a rich man to enter the kingdom of Heaven."
Jesus of Nazareth

Have fun in Hell Mr. Cayne!

[postedby]

Operative phrase: "his holdings"

[SouthCentralDel]

Maybe it is time for an Executive Pay Excess tax. All proceeds go towards social security.

[darker]

His company is BAILED OUT with middle-income Americans' money and he walks away with over
$61 MILLION? WHY? There ought to be a law--and as soon as possible--to DOCK HIS PAY!
99% of his pay should go to SOCIAL SECURITY that Republicans have been ROBBING for years and then pretending s.s. doesn't "work". Jerks.

[Driver125]

Well, it is a positive thing that not EVERYONE was wiped out in this thing, isn't it?. After all, it's distressing to the next generation of heartless, greedy little shlubs who are on the way up to see one of their own reduced to....well, not middle-class standards since they've nearly wiped out that species.....but let's just refer to them as former members of the new Robber Baron Class.

[researcher]

god i love capitalism. reagan you are a genius. sold the middle class on the trickle down theory and deregulation. now we can finally get rid of that pesky middle class all they do is whine.

i live in a gated community and love the idea that one % of americans will have 95% of the wealth. god bless america land of opportunity.

i hire people and pay them next to nothing dont even have to provide health insurance and if they get sick just fire them. god bless america truly a christian nation.

all of my yard people are from south of the border and they work for slave wages. god bless america truly a christian nation. thanks reagan you are my hero. the midddle class has been declining like snow on a hot az summer day.

signed
evangel neo con repub lover of reagan economics. best thing that every happened to america.

finally a nation of have mores and have nots and guess what i am a have more. love it. got to go church tonight. my wife and I sit in the front row both of us are lovers of jesus.

now ohio please put mc cain into office you folks have been so good about helping to eliminate this pesky liberal middle class. love you folks in ohio and flordia. god bless you.

[873450]

Finance industry execs often cite professional sports teams when responding to questions about excessive compensation. They equate themselves with athletes and chant a “pay for performance” mantra. They're free agents ready to jump to an opponent if they don't receive ever increasing pay packages.

When caught using steroids, athletes are stripped of their medals/trophies and banned from future competition. Their athletic achievements are stricken from record books. Currently, baseball’s best pitcher and best hitter face potential prison sentences stemming from their steroid use.

Bonuses and stock option grants are Wall Street’s trophies. Why are these faux-genius bankers allowed to slink away with obscene amounts of money they were paid for hyping performance via recklessly leveraged financial machinations?

A few weeks ago, while Bear Stearns collapsed, James Cayne paid $28 million for two adjoining condos overlooking Central Park. http://nymag.com/daily/intel/2008/03/jimmy_cayne_closes_on_sweet_pl.htmll) Some media outlets sympathetically report his $1 billion fortune was reduced to a mere $60 million. The guy burns down his own house and keeps money paid to him when he poured gasoline all over it. Cayne should be selling pretzels on the sidewalk across the street from the Plaza, not living in it.

A year after rattling financial markets by blowing up his Long Term Capital Management hedge fund, John Meriwether formed another one and was welcomed back at the casino like nothing happened. Will Cayne to follow in his footsteps?

Where’s the sheriff?

[WIpatriot]

Sheriff got busted for having sex.