![]() ![]() ![]() The kind of person who is often sent packing within a short period. Anyone who has ever tried to hire someone realizes that it is not an impossible task to come up with a resume that looks good, yet the person turns out to be a poor hire. While it is not surprising that there was a pattern of sexual harassment in the securities industry, a pattern that may continue to today, what is amazing is the tacit or overt institutional approval of this Animal House behavior at Smith Barney.Īny brokerage, any business, can end up with a rogue or two, male or female, as an employee. One wonders how any rep ever met his or her production quotas. This room, where brokers seemed to spend a hell of lot of time, had a makeshift bar as well as a bicycle and toilet seat hanging from the ceiling. This madhouse brokerage had a frequently used party room called "the Boom-Boom Room." Antilla, who has excellent sources because she covered the story as it exploded across the pages of the national media, provides chapter and verse of a persistent pattern of sexual harassment at Smith Barney's Garden City, New York branch. Most of what went on will not, indeedĬannot, be described here. She provides shocking and graphic detail. Reading this racy book about the sexual harassment of women at Smithīarney, certain phrases kept crossing my mind: How could it have happened? You've got to be kidding me. Amex rose 62.5 cents on the New York exchange to close at $28 a share.(Bloomberg Press, Princeton, New Jersey, 342 pages, $26.95) Primerica closed Friday at $49.50 a share in New York Stock Exchange trading, up $1.50 for the day and $11.375 for the week as investors applauded the transaction’s money making potential for the acquirer. Primerica said it plans to fund the cash portion of the transaction and strengthen Smith Barney’s capital base by issuing $550 million in new debt securities and about $500 million in unspecified equities. and the anticipated gain on the sale of shares in First Data Corp., American Express said. ![]() ![]() But the loss on the sale will be partly offset by the previously announced gain on the sale of the Boston Co. Golub said the sale of the brokerage would allow his company to focus on its three principal subsidiaries: Travel Related Services, IDS Financial Services and American Express Bank.Īmerican Express will take a first-quarter charge of about $630 million because of the sale, including taxes, transaction-related costs and a reduction in goodwill of $750 million, the companies said in a statement. If costs exceed $50 million, the balance will be split 50-50 by Amex and Primerica. Litigation costs related to wrongdoing by Shearson’s retail brokerage network will be absorbed by a $50-million reserve Amex is transferring to Primerica. The payments will consist of up to $50 million annually for three years, which Amex head Golub said were certain to be paid, plus 10% of after-tax profit in excess of $250 million per year over a five-year period.Īmex, however, would still be on the hook for millions of dollars in litigation claims relating to ill-fated partnerships and tax-shelters Shearson created and marketed to its customers. Primerica said it also agreed to pay out future contingent amounts based on the new unit’s performance. Under terms of the agreement, Primerica will pay American Express $850 million in cash, $125 million in Primerica convertible preferred stock and $25 million in common equity warrants. Weill knows that “the key to any operation is its sales force,” said Frank Suozzo, an analyst with S.G. Long Jr., director of equity research at First of Michigan Corp., a Detroit-based brokerage firm. “This gives Sandy a major distribution network through which he can push all kinds of products and services,” added Perrin H. “Sandy understands that the average consumer needs sales people to help them through the thicket.” “If our industry was bewildering 20 years ago, it’s even more bewildering today,” said Seth Gersch, managing director and chief administrative officer of Montgomery Securities in San Francisco. Observers said Weill is banking on the assumption that Smith Barney Shearson’s sales force, second in size only to Merrill Lynch’s, will become an increasingly valuable asset as financial products and services continue to proliferate, and confused baby boomers seek financial security. “Sandy Weill has made a billion-dollar bet on the traditional brokerage business at a time when many people are saying that discount brokerages and mutual funds are the wave of the future,” said Kieran Beer, managing editor of the Wall Street Letter, a weekly trade publication. But some analysts noted that creating a retail mega-brokerage could prove risky. ![]()
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