Page 635 - untitled

606 Notes to Chapter 15

17. Matthew Eichner, interview by FCIC, April 14, 2010.
18. Wendy de Monchaux, interview by FCIC, April 27, 2010; Steven Meyer, interview by FCIC, April
22, 2010.
19. Mike Alix, interview by FCIC, April 8, 2010.
20. Eichner, interview.
21. Timeline Regarding Bear Stearns Companies Inc., April 3, 2008, produced by SEC.
22. SEC Office of Inspector General, Office of Audits, “SEC’s Oversight of Bear Stearns and Related
Entities: The Consolidated Supervised Entity Program,” Report No. 446-A, September 25, 2008, pp. ix–x.
23. Michael Halloran, interview by FCIC.
24. Cayne, interview.
25. Samuel Molinaro, testimony before the FCIC, Hearing on the Shadow Banking System, day 1,
session 1: Investment Banks and the Shadow Banking System, May 5, 2010, transcript, p. 43; Cayne,
interview.
26. “Changes in Approved Commercial Paper List—10/01/2007–12/31/2007” and “Changes in Ap-
proved Commercial Paper List—1/01/2008–3/31/2008,” produced by Federated Advised Funds.
27. Federal Reserve Bank of New York, “Tri-Party Repo Infrastructure Reform,” white paper, May 17,
2010, p. 7.
28. Seth Carpenter, interview by FCIC, September 20, 2010.
29. Information provided by Federated to the FCIC.
30. Scott Goebel, Kevin Gaffney, and Norm Lind (Fidelity employees), interview by FCIC, February
25, 2010.
31. Steve Meier, executive vice president State Street Global Advisors, interview by FCIC, March 15,
2010.
32. Timeline Regarding the Bear Stearns Companies Inc., April 3, 2008, pp. 1–2, provided to the
FCIC.
33. Alan Schwartz, interview by FCIC, April 23, 2010.
34. Lucian A. Bebchuk et al., “The Wages of Failure: Executive Compensation at Bear Stearns and
Lehman 2000–2008,” November 22, 2009, Table 2, p. 15; SNL Financial.
35. Thomas Marano, interview by FCIC, April 19, 2010.
36. Paul Friedman, quoted in William Cohan, House of Cards: A Tale of Hubris and Wretched Excess
on Wall Street (New York: Doubleday, 2009), p. 71. Although Friedman acknowledged to the FCIC mak-
ing the cited statements, and many others as well, he attributes them to anger and frustration over Bear
Stearns’s failure. Currently, Friedman is employed at Guggenheim Securities, Inc., where he works for
Alan Schwartz, the former president of Bear Stearns. Paul Friedman, interview by FCIC, April 28, 2010.
37. The Corporate Library, “The Bear Stearns Companies Inc.: Governance Profile,” June 20, 2008,
p. 4.
38. Cayne, interview.
39. Molinaro, interview.
40. Cayne, interview; Schwartz (interview by FCIC) stated that bonuses for individual executives were
discussed by the Compensation Committee, and the final recommendation for bonuses came from the
CEO.
41. Alix, interview.
42. Bear Stearns, 2007 Performance Compensation Plan, p. I-1 (provided to the FCIC); Alix, inter-
view. The salary cap had been raised from $200,000 to $250,000 in 2006 (Alix, interview; Cayne, inter-
view).
43. Bebchuk et al., “The Wages of Failure,” Table 1, p. 12; Table 2, p. 15; Table 4, p. 20. The budget au-
thority for the SEC in 2008 was $906 million; in 2010, it was $1.026 billion.
44. In 2006, Alix received $3 million in total compensation, Cayne received more than $38.3 million
in salary and bonus, and Schwartz received more than $35.7 million in salary and bonus. SNL Financial;
interviews with Spector and Alix.
45. Marano, interview.
46. Tom Marano, email to Alan Schwartz and Richie Metrick, February 12, 2008.
47. Matthew Eichner, email to James Giles et al., January 30, 2008.
48. Lou Lebedin, interview by FCIC, April 23, 2010.