The Drexel Connection at Global Crossing

A swanky office in Beverly Hills, brash investment bankers scoring hundred-million-dollar paydays, a spectacular collapse ending in federal investigations. The belly flop of Global Crossing Ltd. seems remarkably similar to the saga of Drexel Burnham Lambert Inc., the investment bank that imploded a dozen years ago. In fact, it may be more than coincidence. At least five key players in the startup of Global Crossing were prominent executives at Drexel.

Gary Winnick, Global Crossing's founder and chairman, ran Drexel's convertible bond desk in the early 1980s and sat just a few feet from junk-bond king Michael R. Milken. Less well-known are four of Winnick's Drexel colleagues, now at Toronto-based Canadian Imperial Bank of Commerce (CIBC), which provided a healthy chunk of Global Crossing's initial capital. Because of its investment, CIBC, one of Canada's five largest banks, has realized more than $1.3 billion in profits from Global.