Warren Spector, Bear Stearns’ President and co-Chief Operating Officer resigned on Sunday, as the financial giant faces its biggest downturn in decades. Spector was expected to succeed the current Chairman and Chief Executive James Cayne. Rumors of the possible firing of Spector were already circulating on Saturday, so the board met to discuss the matter on Sunday, although a meeting was scheduled for Monday. Bear Stearns Chairman and CEO James Cayne asked for Spector’s resignation earlier last week.
Some shifts have happened within the company, with Alan Schwartz, president and co-chief operating officer since 2001, becoming the sole president, and Samuel Molinaro becoming COO and CFO.
Standard & Poor’s Rating Services changed Bear’s rating outlook from ‘stable’ to ‘negative’, meaning that the chances of a credit downgrade have increased. Shares plunged immediately and the company arranged a conference call, featuring some awkward behavior from CEO Cayne, which didn’t help improve investor sentiment much. Bear tried to convince investors that its “balance sheet is strong and liquid”, but this didn’t help to dissipate concerns over troubled hedge funds and market instability. Shares of Bear Stearns have lost more than 30% so far this year.
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