James Cayne

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For those of a similar name, see James Cane (disambiguation) and James Caine (disambiguation).
James E. Cayne
Born (1934-02-14) February 14, 1934 (age 80)
Nationality United States
Ethnicity Jewish
Education Purdue University (did not finish)
Occupation businessman
Known for CEO of Bear Stearns
Net worth $900 Million (2005)
Spouse(s) Spouse1 (divorced)
Patricia Denner
Children Allison Cayne Schneider
Family Richard C. Perry (nephew)

James E. "Jimmy" Cayne (born February 14, 1934) is an American businessman, a former CEO of Bear Stearns. In 2006 he became "the first Wall Street chief to own a company stake worth more than $1 billion"[1] but he lost most of that in the 2007–2008 collapse of Bear Stearns' stock and sold his entire stake in the company for $61 million.[2] CNBC named Cayne as one of the "Worst American CEOs of All Time".[3]

Early life and career[edit]

Cayne grew up in Evanston, Illinois. His father was a patent attorney.[4] Cayne attended Purdue University, but he left before graduating to join the United States Army.[5]

His first job was as a traveling salesman selling photocopiers in the Midwest.[6] He subsequently sold scrap iron and municipal bonds.[7] In 1969 he was playing bridge full-time in New York City when Alan C. Greenberg, then a relative novice at the bridge table, hired him as a stockbroker at Bear Stearns.[8] Cayne became president in 1985, CEO in 1993, and Chairman of the Board (while continuing as CEO) in 2001. He was replaced as CEO only in 2008[9] and he was with the company until its demise.

In July 2007, Cayne was absent from New York during a 10-day bridge convention ("tournament") in Nashville, participating in multiple competitions, when two Bear Stearns hedge funds collapsed. Bankruptcy proceedings for the funds were initiated on his last day of competition.[1] When in New York, Kate Kelly reported for the Wall Street Journal, Cayne generally left the office on Thursday afternoon and spent Friday a golf club "out of touch for stretches".[1] In March 2008, as Bear Stearns was on the verge of bankruptcy, Cayne played bridge in a two-day competition at Detroit, Thursday and Friday March 13–14.[10]

Cayne has been the subject of various press reports since the Bear collapse, including the fact that he sold his stake in the company for $61 million after its crash.[2] On March 14, 2008, Charlie Gasparino of CNBC reported that the value of Cayne's holdings in Bear Stearns had declined from $997 million to significantly less than $200 million in the wake of Bear Stearns liquidity crisis. Just days later, Bear Stearns came to agreement with competitor JP Morgan for a full buyout at only $10 share, roughly $236 million for the entire firm. At the time, Cayne had significant exposure to the company's stock, with most of his net worth tied up in shares of the company. It is estimated that the value of Cayne's holdings had dropped to less than $15 million as a result, effectively removing him from the list of the wealthiest individuals in the country. On March 27, 2008, it was announced that Cayne sold his entire stake in Bear Stearns, over 5.61 million shares, for $10.82 a share.[11] This stake was sold prior to the vote on the renewed bid by JP Morgan for Bear Stearns.

Cayne was also named in Time Magazine's list of '25 People to Blame for the Financial Crisis'.[12]

Wall Street Journal allegations[edit]

The Wall Street Journal reported that Cayne was playing bridge and golf and was often out of touch from his firm while its hedge funds collapsed. Cayne responded to the report saying the allegations of "inappropriate conduct" are "absolutely untrue." The journal also reported that Cayne has sometimes smoked marijuana after bridge tournaments. When asked about this, he said he would respond only "to a specific allegation."[13]

Drug use[edit]

Cayne was known in the financial industry as a heavy marijuana user, a fact reported multiple times in the US media,[14] and known as a user in the bridge world.[1] According to Charles Ferguson, reviewing the world financial crisis for The Guardian in 2012, Greenberg called Cayne a "dope-smoking megalomaniac"[14] Ferguson suspects Cayne of fraudulent business activities and suggests that the US police should arrest him for his drug use, if he cannot be prosecuted for fraud.[14] A 2009 book by financial reporter Charlie Gasparino also described him as a self-identified cocaine user.[15]

Personal life[edit]

In 1971, Cayne married his second wife, Patricia Denner,[16] who is also Jewish;[17] they have one child, Allison Cayne Schneider.[18] Allison is divorced[18] from hedge fund manager Jack Schneider[19] with whom she has five children.[18] He is uncle to hedge fund investor Richard Cayne Perry.[20]

Cayne, himself a sound bridge player,[6] has recruited international-class professionals to form teams that have won more than a dozen North American championships. For example, he hired one American and four Italian world champions to win the Reisinger Board-a-Match Teams in November 2011, his sixth win in that teams-of-four competition.[21] His bridge career as a sponsor and player has resulted in attaining the ranks of ACBL Grand Life Master[22] and World Bridge Federation World Master.[23] In the biennial Bermuda Bowl world championship teams, his 1995 team USA1 —one of two that represented the United States, a unique status— finished ninth, (the lowest U.S. finish in the sixty year history of the event), while Team USA2 placed first.[24] In March 2002, a new daily newspaper, The New York Daily Sun, announced that Cayne would be contributing a bridge column.[25] [clarification needed]

In 2005, Forbes magazine ranked him 384th among the 400 richest Americans, with an estimated net worth of $900 million.[8] By 2008 Cayne had lost nearly 95% of his fortune as a result of the collapse of Bear Stearns. On February 15, 2008, the Caynes purchased two fourteenth-floor condominium units in Plaza Hotel overlooking Central Park in New York for $27.4 million.[26]

Bridge accomplishments[edit]

Wins

North American Bridge Championships (16)

United States Bridge Championships (1)

  • Open Team Trials (1) 1995

Other notable wins:

  • Maccabiah Games (1) 1981
  • Cavendish Invitational Teams (1) 1986
  • Cavendish Invitational Pairs (1) 1982
  • Goldman Pairs (1) 1968
Runners up

North American Bridge Championships (15)

United States Bridge Championships (1)

  • Open Team Trials (1) 1998

Other notable 2nd places:

  • Now! Invitational Pairs (1) 1981
  • Cavendish Invitational Pairs (1) 1976

References[edit]

  1. ^ a b c d Kate Kelly (November 1, 2007). "Bear CEO's Handling Of Crisis Raises Issues". Wall Street Journal.
  2. ^ a b BBC staff (March 28, 2008). "Bear Stearns chairman sells stake". BBC News.
  3. ^ Portfolio.com staff (April 30, 2009). "4. Jimmy Cayne". Portfolio's Worst American CEOs of All Time. CNBC.
  4. ^ Landon Thomas, Jr. (March 28, 2003). "Distinct Culture at Bear Stearns Helps It Surmount a Grim Market". New York Times.
  5. ^ Onaran, Yalman; Keoun Bradley (January 8, 2008). "Cayne to Step Down as Bear Stearns CEO, Person Says". Bloomberg News.
  6. ^ a b Landon Thomas, Jr. (June 29, 2007). "Salvaging a Prudent Name". New York Times.
  7. ^ Allen R. Myerson (July 14, 1993). "Careful Player Moves Closer To the Top at Bear Stearns". New York Times.
  8. ^ a b "#384 James Cayne". Forbes 400 (2005). Reprinted online under "The Forbes 400: The Richest People in America" (2012) without index to previous annual lists. Retrieved 2013-01-28.
  9. ^ "The Bad Boys Of Bear Stearns: Where Are They Now?". Business Insider. Retrieved 20 June 2013. 
  10. ^ Kate Kelly (March 14, 2008). "Where in the World is Bear's Jimmy Cayne? Playing Bridge.". Wall Street Journal.
  11. ^ David Ellis (March 27, 2008). "Bear Stearns' Cayne sells over $60M in stock". CNNMoney.com. Archived from the original on 2008-03-27. 
  12. ^ "25 People to Blame for the Financial Crisis". Time. February 11, 2009. Retrieved 27 March 2013. 
  13. ^ "James Cayne lashes back at WSJ report". CNN. November 1, 2007. Retrieved 27 March 2013. 
  14. ^ a b c Charles Ferguson (May 20, 2012). "Heist of the century: Wall Street's role in the financial crisis". Books (London: The Guardian). Retrieved 2012-05-27. 
    • This article is reprinted online under headings "Business > Financial crisis" and "Books". A sidebar cites Inside Job: The Financiers Who Pulled Off the Heist of the Century by Charles Ferguson and provides a link to "Buy it from the Guardian bookshop". The relation between article and book is not explained or clearly indicated online. Retrieved 2012-01-28.
  15. ^ Tkacik, Moe. "Gasparino: ‘People Think Because I Go on TV and Scream a Lot I Don’t Have Half a Brain in My Head’". New York Magazine. Retrieved 15 April 2013. 
  16. ^ Fortune: "The rise and fall of Jimmy Cayne - Last summer he was worth $1.6 billion on paper. Then he nearly died and Bear Stearns collapsed." By William D. Cohan August 25, 2008
  17. ^ Chabad.org: "Manhattan's Young Couples Thrilled By New Marital Trend - The Upper East Side is rediscovering and enjoying a millennia-old practice." August 27, 1999
  18. ^ a b c New York Times: "Home and Hearth, Deluxe Edition" By JULIE SATOW April 25, 2013
  19. ^ New York Times: "Once Around the Block, James, and Pick Me Up After My Nap" by ERIC KONIGSBERG January 24, 2007
  20. ^ Forbes staff ? (date?). Forbes http://people.forbes.com/profile/richard-c-perry/29745.  Missing or empty |title= (help)[dead link]
  21. ^ "Cayne dominates in Reisinger Repeat Victory". ACBL.
    (Here "Cayne" is the name of the team.)
  22. ^ "ACBL Grand Life Masters". ACBL.
  23. ^ "Jimmy CAYNE". World Bridge Federation: People. WBF.
  24. ^ "32nd World Team Championships: Results & Participants", 1995. World Bridge Federation.
  25. ^ Patrick McGeehan (March 24, 2002). "Private Sector; Call Him a Specialist In Bridge Financing". New York Times.
  26. ^ ACRIS Main Options.[dead link]

External links[edit]