Is Peter Cohen A Fish Out Of Water?

In the 1980s, Shearson Lehman Brothers Chairman Peter A. Cohen was the quintessential high-rolling investment banker. And when he suffered a downfall--after missteps in RJR Nabisco Inc.'s takeover battle and a final falling-out with American Express CEO James D. Robinson III--there was scarcely a wet eye on Wall Street. Cohen was not the most popular man in the business--and he knew it. "Peter paid huge emotional dues over the past four years," says a friend. "Imagine seeing yourself on the theater marquee every night--and then not getting any scripts at all."

To his friends on the Street--none of whom would be quoted on

the record--Cohen is a brilliant executive. Nevertheless, the talk on Wall Street is that Edmond Safra has given Cohen a job as chairman of Republic New York Securities Corp.--and vice-chairman of Republic New York Corp.--in gratitude for some unspecified favor in the past. "What favor?" exclaims Walter H. Weiner, Republic New York Corp.'s CEO. "If there was a favor," says Cohen, "Edmond could have figured out a less elaborate way of paying it back."

MEDIA MAGNET. Still, even Cohen's friends find it hard to view a man of his lofty ambitions as the head of a conservative bank's securities division. And another as yet unresolved issue is even more fundamental: Will Republic Securities be an aggressive, highly visible new force on the Street? Or, as billed by such top executives as Treasurer Thomas F. Robards, is it mainly designed to serve the bank's existing customers?

Cohen's public image is a sore point. He does not seek publicity--it has not been favorable, after all--but Republic honchos are clearly nervous that he will attract attention. For example, they refused to allow BUSINESS WEEK to photograph Cohen alone--only with other executives.

There are some signs of internecine tensions. Neither Cohen nor Republic New York Securities CEO Louis B. Lloyd have ever been involved in running a prime brokerage. And now, because of approval granted in January by the Federal Reserve, they can engage in any kind of activity, including underwriting and proprietary trading. So how will those broad powers be used? No one is sure just yet, but already, the way Safra's inner circle envisions the future of Republic Securities seems a lot different from the way that it is seen by Cohen and his people.

For example, Jeffrey C. Keil, president of Republic New York Corp., believes Republic Securities is likely to make inroads into discount brokerage, perhaps beginning with brokers in the bank branches, something Republic has already been doing on a small scale. However, Cohen does not think much of that idea, instead talking of expanding in the hedge fund and high-net worth brokerage business. Weiner, Republic New York's CEO, likens the nascent Republic Securities to a "centipede"--a metaphor he is quick to retract.

That's true--for now. But whatever Republic Securities does, if Cohen has anything to say about it, it will be big. "We're still young," says the 47-year-old Cohen. He could be talking about Republic Securities. Or he could just be talking about himself.

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