Boston Co. Brass Hits The Road
MELLON BANK HAS SUFFERED another blow in its push to become a money-management powerhouse. On Apr. 19, the six top executives at its Boston Co. asset-management unit, including President Desmond Heathwood, resigned. They say they plan to launch their own investment firm. The exodus follows Mellon's rejection of a buyout offer by Heathwood--his second since 1992. And it caps a history of disputes over compensation and control since Mellon paid $1.5 billion for the unit in 1992. A major source of tension, say insiders: the firing of two Boston Co. traders last year following $130 million in derivative losses. Mellon faulted Boston Co., but Heathwood is said to have believed Mellon should have shared the blame. Heathwood, whose team brought in most of Boston Co.'s assets under management, did not return calls. Mellon, which also has lost key personnel at its Dreyfus mutual-fund unit, cited "significant philosophical differences between Mr. Heathwood and us" in explaining the exodus.