IT'S THE SORT OF ASSET flight that fills money managers' nightmares. Four months after a mass exodus of top executives at Mellon Bank's Boston Co. asset-management unit, investors have pulled out $11 billion, or 42%, of its total assets. In April, Boston's chief investment officer, Desmond Heathwood, quit in a dispute with Mellon management over autonomy and pay, taking 13 top investment pros with him. On July 18, Mellon moved to stanch the hemorrhaging, hiring as Boston Co.'s new CIO Alexander "Toby" Webb III, former president of Fidelity's $27 billion trust unit. Webb says he wouldn't have taken the job if he thought Mellon would interfere.

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