One of Wall Street's longest-running job vacancies was filled on May 24, when Joseph Gregory, 52, became president of Lehman Brothers (LEH). The investment bank, run by hands-on CEO Richard Fuld Jr., 58, hasn't had a second-in-command since 1996.
So why the new appointment? Now, "if I'm not available, Joe is clearly No. 2," says Fuld. He can also rely on Bradley Jack, who was promoted from co-chief operating officer to the office of the chairman. Fuld doesn't plan on retiring anytime soon. But he has been doing more globe-trotting to win over clients and expand Lehman's reach.
Like Fuld, Gregory earned his stripes in Lehman's hallmark fixed-income business. As the firm diversified, he became the head of global equities and, later, co-COO with Jack. Gregory says he wants to take Lehman to the next level by adding new talent. "As we continue to get the absolute best people here, that will be our competitive advantage," he says. Rivals, be warned.
Add Wellington Management to the list of asset management companies being investigated by the Securities & Exchange Commission. While Boston-based Wellington has been notifying clients for several weeks that it's under an SEC probe related to trading practices and procedures, the news didn't hit the press until May 26. Wellington says it doubts the inquiry has anything to do with market timing or late trading, which have plagued several high-profile fund families, including Strong and Janus.
Wellington manages $120 billion in 13 mutual-fund and annuity portfolios for Valley Forge (Pa.) Vanguard Group, the nation's largest fund family. Vanguard said in a statement: "To date, we are not aware of any specific link between the inquiry and Wellington's management of Vanguard funds."
If you're Robert Greifeld, CEO of NASDAQ (NDAQ), you can take it with you. A year after leaving SunGard Data Systems (SDS) to become NASDAQ's chief, Greifeld is cutting a deal with his former employer to acquire its electronic trading network. On May 25, NASDAQ announced it will pay $190 million in cash for SunGard's Brut unit, operator of the Brut network, which Greifeld helped develop. Greifeld aims to bolster NASDAQ's falling market share and beef up its technology. Buying Brut could add 10% to 12% to NASDAQ's current 51% share of trades reported through its system, he says.
German telecom Deutsche Telekom (DT) said on May 25 it will buy networks in California and Nevada for $2.5 billion from Cingular Wireless, jointly owned by BellSouth (BLS) and SBC Communications (SBC). Cingular had shared the networks with T-Mobile USA, a DT subsidiary. By selling the assets, Cingular avoids a hurdle that could have held up its proposed acquisition of AT&T Wireless (AWE), which also owns networks in the same Western states. Analysts now figure the merger will easily close by yearend. For T-Mobile the deal brings much-needed capacity to spur growth. Although it has expanded, T-Mobile wasn't seen as a true nationwide player without facilities in California, analysts say. Now it has a 5% share of the Golden State's wireless market.
Investors didn't exactly flock to Genworth Financial's (GNW) coming-out party on May 25. Shares of the General Electric (GE) insurance spin-off were priced at $19.50, below the expected range of $21 to $23, and ended the day unchanged after trading as low as $18.75. Investors were skittish about its reliance on mortgage insurance at a time of rising interest rates -- though GE insists that any slowdown will be offset as higher rates boost returns in the company's investment portfolio. The real worry may be the prospect of more share sales by GE, which still owns 70% of the $10 billion insurer.
-- Computer Associates has offered $10 million to resolve a federal accounting probe.
-- Krispy Kreme Doughnuts (KKD) reported a $24.4 million quarterly loss, its first since going public.
-- Toys 'R' Us (TOY) sued Amazon.com (AMZN) to stop other toy merchants' sales on the site.
TiVo (TIVO) jazzed Wall Street with the news that it added 264,000 new subscribers in the quarter ended Apr. 30, thanks to its deal with DirecTV (DTV). TiVo shares rose 6%, to $7.99, on May 26. CEO Mike Ramsay expects the TV recording company to be profitable by 2006.