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Chick Flick

From Bloomberg:

Hollywood hasn’t released a notable female-led film set on Wall Street for 27 years. Not since Mike Nichols’s 1988 comedy Working Girl—starring Melanie Griffith as a plucky wannabe banker with “a mind for business and a bod for sin”—has a major film focused on a woman navigating the combative, competitive, and outright cutthroat offices at the center of the business world.

Now, two ambitious filmmakers aim to give the genre a much-needed update, and they’re soliciting feedback—and funding—from some of Wall Street’s biggest names. Equity, a movie about a female investment banker whose IPO is in jeopardy, is the product of interviews and meetings with dozens of former and current dealmakers, including James B. Lee Jr., a vice chairman of JPMorgan Chase, Barbara Byrne, a vice chairman of Barclays, muni bond maestro Alexandra Lebenthal, and Elaine La Roche, a former Morgan Stanley managing director who reigned as one of the most powerful women in finance in the 1990s.

The movie, which begins filming next month, is the brainchild of Sarah Megan Thomas and Alysia Reiner, actresses who met doing a play together a few years ago.

Thomas is class of 2001.

Byrne and Straight declined to disclose how much money they’ve put in, but Straight insists this isn’t a vanity project for her. “I’ve increased my investment level because I believe I’m going to make money on this film,” she says. Jimmy Lee, the storied dealmaker, offered ideas and brokered introductions for the film. Thomas graduated from Williams College, Lee’s alma mater, and he says he tries to help fellow grads who are trying to do something out of the ordinary. “I liked that they were getting dirt under their fingernails for this project,” Lee said during an interview in his Midtown Manhattan office, where he keeps a copy of Sheryl Sandberg’s Lean In on a book-laden coffee table.

This was the last news article mentioning Jimmy before his untimely death last month.

Kudos to Jimmy for helping out a fellow Eph! And the lesson to our readers: Use the Williams network!

Also, for all the future investment bankers among our readership, note how Jimmy ensures that the reporter sees (and reports on!) the prominent placement of Sandberg’s book. Keeping clients (and potential clients) happy is the secret to success in more industries than banking . . .

By the way, or any readers offended by my title for this post? I just copied it from the original title of the Bloomberg news article, which you can still see in the url. Since then, Bloomberg has changed the title to be — take your pick — less offensive or more politically correct.


Keep My Romance Alive


From the Wall Street Journal:

Jimmy Lee was able to cross social circles from an early age.

Mr. Lee, a famed J.P. Morgan Chase JPM +0.88% & Co. dealmaker who died unexpectedly Wednesday, was part of several different social groups while a teenager attending the Canterbury School, a Catholic boarding school in New Milford, Conn.

As co-editor of the school newspaper, The Tabard, he ruffled feathers while also serving as co-captain of the varsity hockey and varsity track teams, and a member of the football squad.

“While at Canterbury, I was early on regarded as a jock…but I also chose to write for The Tabard school newspaper and became its co-editor,” Mr. Lee said in a 2009 commencement speech at the Canterbury School.

“It was a major unconventional choice as it went against the grain: A jock hanging out with hippies.”

Mr. Lee started at the Canterbury School in 1967, soon after his father – also a Canterbury School alumni – passed away.

“I felt terribly alone,” he told graduates in 2009.

Mr. Lee, who grew up in New Canaan, Conn., soon learned his first Canterbury dorm room, on the top floor of what was then called North House, had been Jack Kennedy’s when he attended Canterbury School in 1930. “Bunk beds, smallest room in the school, a true cubicle,” he said in the commencement address.

Mr. Lee, who graduated Canterbury in 1971, applied to just to one college, going against his counselor’s advice. Williams College in Massachusetts, “was my choice,” he said in the speech.

Around this time he played guitar in a band, a passion he’d continue to seek out while crafting some of the largest deals at J.P. Morgan.

“He was like a little kid” while playing guitar, one of his J.P. morgan band mates said. “It was something from his history.”

During Mr. Lee’s senior year at Williams, he took the place of his then-girlfriend (now wife) for a job interview at a legacy J.P. Morgan bank, Chemical Bank. The interviewer asked Mr. Lee if he wanted the job, and he responded “I definitely don’t want this job, I’m just trying to keep my romance alive here,” he said in the speech.

Mr. Lee said throughout his early years and into his career he made “trust your instinct” choices that sometimes were unconventional, and that defined who he was.

Keeping the romance alive with your Williams girlfriend is highly recommended! Well-done, Jimmy.

By the way, we need official nomenclature for the someone who is your “then-girlfriend (now wife).” Perhaps TGNW?


Can-Do Charm

Lovely remembrance of Jimmy Lee ’75 in Vanity Fair.

Remembering the Can-Do Charm (and Fierce Temper) of Wall St. Legend Jimmy Lee

Everybody on Wall Street has a Jimmy Lee story, mainly because he was the kind of banker who really doesn’t exist anymore. The JPMorgan Chase & Co. vice chairman, who died unexpectedly this morning of a heart attack at age 62, was the kind of investment banker who told you immediately what he could do for you, not what he could not do for you, and then, through his considerable will, forced his firm to make good on his myriad of promises.

He never seemed to get bogged down in the mechanics of deal-making, nor did he seem much concerned with the infernal political infighting that is part and parcel of every big Wall Street firm (even though he had nearly flawless political skills). Rather, he maintained a consistent air of euphoria about the prospect of doing deals. Not for nothing did Jimmy—always Jimmy, not the more formal James B. Lee Jr.—wear his signature suspenders with silver dollars depicted all over them. With his slicked-backed hair and Hermès ties, he looked every bit the part of an unabashed gung-ho, can-do investment banker. He had not the slightest bit of conflict about what he was meant to do, even in the years following the financial crisis when Wall Street bankers were increasingly depicted as unsavory types. That kind of soul-searching was not for Jimmy.

Rest of article is below the break. Read the whole thing. There is even an Adam Falk sighting!

Indeed, the last time I saw Jimmy was on April 9, the night before General Electric announced that it was getting out of most of its finance businesses. My wife and I were invited to a dinner with the president of Williams College, which our two sons attend, as did Jimmy and his three children. Jimmy loved Williams. He had recently joined its board—something he had long aspired to—and the dinner was one of the ways he ginned up financial support for the college. The dinner was a small, intimate affair—eight people or so—and it was held in JPMorgan Chase C.E.O. Jamie Dimon’s private dining room on the 42nd floor of the company’s headquarters at 270 Park Avenue. Jimmy was his usual charming self, extolling the virtues of Williams College and facilitating a dynamic discussion at the table about the virtues of a liberal-arts education.

Cohan’s sons are apparently Teddy ’16 and Quentin ’17. Regular readers will recall that Quentin wrote the best Eph April Fools article in several years and that Teddy was involved in the College Council election scandal this spring.

Rest of article below the break.

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Jimmy Lee ’75, RIP

From the New York Times:

James B. Lee Jr., a pioneering deal maker and among the most influential Wall Street investment bankers of his era, died on Wednesday. He was 62.

Mr. Lee, a vice chairman of JPMorgan Chase, died of a heart attack after working out in his home in Darien, Conn., the bank said.

Mr. Lee, who was universally known as Jimmy, was the behind-the-scenes consigliere to the world’s top corporate chieftains, hatching mergers and public offerings for companies as diverse as General Motors, Facebook and Alibaba. He was a constant presence in the lives of moguls like Rupert Murdoch of the News Corporation and Jeffrey Immelt of General Electric.

He was a throwback, part of a different generation of bankers on Wall Street who were trusted advisers to corporate America based on deep relationships and insights, even as much of investment banking had become commoditized.

Mr. Lee was a colorful character who was known for calling clients at all hours and signing emails “your pal.” More important, behind the trappings of Wall Street culture was a keen intellect. He was an early pioneer of syndicated loans and became a powerful force in the world of leveraged buyouts and private equity, financing deals for Henry Kravis of Kohlberg Kravis Roberts, Stephen A. Schwarzman of the Blackstone Group and the late Theodore J. Forstmann of Fortsmann Little.

Famous on Wall Street for the lengths he would go to woo a client, he bought a Corvette ZR1 to demonstrate his dedication to G.M. during its initial public offering and had hoodies made for Facebook’s I.P.O. as a sartorial homage to its founder, Mark Zuckerberg. He also looked the part of a high-powered banker, with slicked-back hair, pinstriped suits and two-toned shirts with cuff links.

He also often played the role of backstage mediator among companies and activist investors, helping to end contentious battles between Carl C. Icahn and Dell, for example, and mentoring Daniel S. Loeb, the founder of Third Point.

Inside JPMorgan, Mr. Lee was the firm’s rainmaker and one of its longest-serving executives. He often used the firm’s enormous balance sheet to finance complicated transactions. He was also a close friend and adviser to the bank’s chief executive, Jamie Dimon, whose office was just doors away from his. When the bank was under investigation by the Justice Department and Mr. Dimon was under pressure, Mr. Lee had Tom Brady, the quarterback of the New England Patriots, call Mr. Dimon to cheer him up and tell him to “hang in there.”

On Wednesday, Mr. Dimon called Mr. Lee “invaluable,” adding, “Jimmy was a master of his craft, but he was so much more — he was an incomparable force of nature.”

Mr. Lee was animated by the pursuit of the big deal, stoked by a competitive fire and a desire to be in the middle of the action.

In 2005, at a party honoring Mr. Lee, Mr. Dimon told a roomful of chief executives and buyout clients that “Jimmy Lee has probably lent a trillion dollars to the people in this room.” After pausing for effect, he added, “and almost all of it has been paid back.”

As word spread about Mr. Lee’s death on Wednesday, laudatory statements about him came pouring in from every corner.

“Jimmy loved Wall Street more than anyone I’ve ever known,” Mr. Loeb said. “He wasn’t driven by money or deals but by his passion for people. There was no more loyal friend to be had on Wall Street, nor anyone whose wise counsel I valued more. My last correspondence with Jimmy was a note from him titled ‘Bragging,’ where he told me about his son’s admission into a highly competitive securities analysis program at Columbia Business School. He signed off by telling me that despite his long and successful career, his ‘greatest accomplishment’ was his children” — his son, James, and two daughters, Elizabeth and Alexandra.

They survive him, as does his wife, also named Elizabeth.

James Bainbridge Lee Jr. was born on Oct. 30, 1952, in Danbury, Conn. His father ran the Frank H. Lee Hat Company and died of a heart attack when he was 47; Mr. Lee was 11 years old.

Mr. Lee talked about how his father’s death might have driven him to create special bonds and relationships.

“Jimmy was my closest friend in finance,” Mr. Schwarzman said. “It’s hard to explain. He always gave someone the sense — and it was true —that he cared desperately about you.”

Mr. Lee began his career with Chemical Bank in 1975 after graduating from Williams College. He played a key role in starting Chemical’s syndicated loan group in the 1980s, helping fuel a wave of buyouts, and built the investment banking business as the bank became a bigger player through mergers with Manufacturers Hanover and Chase Manhattan Bank. He climbed the ladder to run Chase’s investment banking business and eventually rose to become vice chairman of JPMorgan Chase after the 2000 merger that created the company.

He advised on some on the biggest deals, including United Airlines’ acquisition of Continental, General Electric’s sale of NBC Universal to Comcast and the News Corporation’s purchase of Dow Jones. He scrambled to help save the American International Group during the financial crisis and later helped underwrite its I.P.O.

He was fiercely loyal and considered leaving the firm only once. In his top desk drawer, he kept a copy of the term sheet to become the No. 2 at Blackstone. He most likely would have become a billionaire had he taken the job, because it was long before that firm went public. He would occasionally show it to friends, in part to demonstrate his loyalty to JPMorgan and his colleagues.

Mr. Schwarzman recounted how he had tried to recruit Mr. Lee away and nearly had a deal. “We had the press release ready,” Mr. Schwarzman said. Mr. Lee told him needed to speak with JPMorgan’s chief executive at the time, Bill Harrison. He called Mr. Schwarzman back and told him he couldn’t do it.

“I told him, ‘Don’t feel badly. You’re following your heart,’ ” Mr. Schwarzman said. “He had so much loyalty to the bank and the people there.”


Lee ’75 Worth $185 Million?

According to Wikipedia, Jimmy Lee ’75 “has a personal net worth of 185 million dollars in 2010.” Comments:

1) Lee (and his Eph wife) have already given generously to Williams. The richer they are, the more they have to give.

2) The Wikipedia entry provides no citation, so who knows if this is true. Then again, why would some random surfer make up such a specific number?

3) $185 million seems high to me. Lee is, of course, very rich, but I doubt that his annual income is about $30 million. In 1999 he made $12 million. Assume $15 million per year over last decade, and that is only $150 million. But don’t forget taxes! Even if you make $150 million, the government takes around 40% to 50%.

4) Then again, we don’t know what sort of investments Lee has been making over the course of his career. If he invested a lot of his compensation from the 1990s in the best private equity deals, he could easily be worth $185 million.



Interesting article on Wall Street financier Chris Flowers features this quote.

Flowers may appear nerdy, but he has a quirky charm. And his low-wattage exterior belies a steely determination, whether at the chessboard or in the ongoing battles among Wall Street alpha males, that has served him well. He may not be outgoing, but he’s the sort of person a top executive can feel comfortable trusting. “I like someone who is 24/7, always reachable, keeps their cool, thinks through problems carefully and as a partner,” says James B. Lee Jr., a vice chairman at J.P. Morgan Chase who has worked with Flowers in myriad capacities and whose company is a limited partner in his funds. “He’s a very, very good and natural partner.”

1) This is another example of Lee ’75 sucking up to a past (and future) client. Not that there is anything wrong with that!

2) A phrase like “Wall Street alpha males” will go unremarked in an article like this. How will our grandchildren read that?

3) Why is the male:female ratio among the finance elite at least 10:1 and more like 25:1 or even 100:1? Excellent question. At least one reason is the “24/7, always reachable” portion of Lee’s quote. Success in finance, especially at a place like Goldman, requires exactly that. Are you the sort of person who might not want to be reachable 24 hours a day, who might want to visit your daughter’s class, go on her field trips or coach her soccer team? Good luck with that if you want to climb the greasy pole at Goldman. Women or more likely than men, I think, to make sensible choices with regard to those trade-offs, so they are much less likely to make it to the top.

What explanations would readers give to the puzzle of female underrepresentation in elite finance?


Trillion Dollar Man

Erin Burnett ’98 interviews Jimmy Lee ’75 at the Sun Valley conference organized by Herb Allen ’62. It is an Eph triple play!

Best quote: “Once an Eph always an Eph.”

More later . . .


Banker’s Bluff

Want to write an amazing senior thesis in economics or political science next year? Tell the story of the Chrysler bankruptcy. Start with the Wall Street Journal.

biz034bPresident Barack Obama’s auto task force heard a blunt message early this spring from J.P. Morgan Chase & Co., the largest lender to Chrysler LLC. In any deal to remake the troubled auto maker, Chrysler would have to repay its lenders all $6.9 billion it owed.

“And not a penny less,” said James B. Lee Jr., vice chairman at the bank, in a call to auto task-force boss Steven Rattner on March 29.

The next day, Mr. Obama called the banker’s bluff. The president stepped before a podium to announce that Chrysler could face a disorderly bankruptcy or even liquidation. His meaning was clear: If that happened, the lenders would get nowhere near $6.9 billion.

A few hours later, Mr. Lee called Mr. Rattner back. “We need to talk,” he said.

Indeed. That’s Jimmy Lee ’75, subject of several EphBlog posts and most successful Eph banker of his generation. He and his wife Elizabeth (also class of 1975) donated enough money to get their name on a plaque at the Paresky snackbar. Further discussion below.
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Cycle or Spiral?

I vote/hope cycle.

Williams alumni, faculty, and staff will discuss implications of the turmoil in world financial markets on Thursday, Oct. 23, at 8 p.m. in Chapin Hall. The session, which is free and open to the public, is titled, “Cycle or Spiral?: Financial Markets in Crisis.”

“We’re fortunate to have in the Williams family financial professionals and academics with such extraordinary depth and range of experience to help us understand better an issue of urgency to the world,” Williams President Morton Owen Schapiro said. “I look forward to hearing their insights.”

Alumni participants will be Paul Isaac ’72, principal of Cadogan Management, and James Lee ’75, vice chairman of JPMorgan Chase & Co. and Co-Chairman of its Investment Bank. Campus participants will be Collette Chilton, chief investment officer, Gerard Caprio ’72, professor of economics, and Kenneth Kuttner, professor of economics. Moderating the session will be Stephen Sheppard, professor and chair of economics.

Kudos to whoever arranged the event and to Ephs like Isaac and Lee for traveling all the way to Williamstown to participate. It is either a very good or very bad sign for the global economy that Jimmy Lee has this much free time. Comments:

1) Does Jimmy Lee really look like an alligator?

2) Attendees should feel free to borrow some questions from here, especially 2) and 4).

3) Again, the most important financial question facing the Williams endowment is whether or not to rebalance.

4) Question: “Given what we now know about the volatility of the financial markets, was it wise for Williams to issue $267 million worth of bonds? And, assuming that we now recognize that as a mistake, when do you expect the College to be debt free?”


Financial Titans

An Eph connection to the bailout?

Republican Sen. John McCain said he would suspend campaigning to help tackle a $700 billion bailout proposal and called on Democratic rival Sen. Barack Obama to postpone their debate Friday, as the roiling U.S. financial crisis took center stage in the presidential campaign.

Another key event that aides said prompted Sen. McCain’s actions: a roundtable Wednesday morning with some of Wall Street’s biggest names, financial titans who told him that the rescue legislation must be passed soon. “We urged John to get all over it, that this is a national-security crisis,” one financial executive said.

The financial executives, who were told on Tuesday that Sen. McCain wanted to meet with them the next day, included Merrill Lynch & Co. CEO John Thain, J.P. Morgan Chase & Co. Vice Chairman James Lee and private-equity fund owner Henry Kravis.

For Sen. McCain, figuring out how to handle the bailout bill presented a particular challenge because much of the resistance to the plan has come from conservatives alarmed at the cost of bailout and the scope of powers that would be granted to the Treasury secretary.

Sen. McCain, who has never been close to conservatives, has worked hard during the election season to earn their trust. But that could be at risk if he were to support a package that former House Speaker Newt Gingrich called “a dead loser on Election Day.”

Why are so many Democrats in favor of this bail out?

1) A “national-security crisis?” Give me a break! We are already in a recession. Obviously, we all hope that the recession will be brief, but there is no good evidence that this particular plan will do any good. All the smartest observers (e.g., here, here and here) are against it. Haven’t Democrats learned that “national-security crisis” is a smokescreen for policies that they ought to oppose? Just because rates on short term commercial paper are high does not mean that alien invasion is nigh.

2) As much as all good Ephs like Jimmy Lee ’75, don’t Democrats read EphBlog?

Someone at Chase once said, Jimmy is like a crocodile: He sits there with his eyes just a bit above the water saying, “Oh yeah, come just a little bit closer.”

Come a little close John McCain (and the rest of the Washington establishment). Just a little closer.

Jimmy Lee (and John Thain and Henry Kravis and most of Wall Street) have hundreds of billions of dollars of lousy assets, stuff that they value at 50 cents on the dollar but which is actually worth only 25 cents (or whatever). They want the US Government (which means you, future taxpayers) to buy it from them at 50 cents, or even more. I can imagine plutocrat-worshiping Republicans doing that, those shameless lick-spittles, but why would any Democrat be in favor of making Jimmy Lee richer?

Perhaps my Democratic friends can explain this to me. (And don’t even start with “No bailout means financial Armageddon.” That is just bunk, designed to stampede the rubes into action.)

3) And aren’t the politics interesting? Unless something dramatic happens, I don’t see how McCain can beat Obama. But what if McCain demagogued the bailout, as I previously urged Obama to do? Doing so would allow him to be against both Bush and the Washington consensus. He, not Obama, would become the candidate of change. Perhaps such a gambit wouldn’t be enough to win, but it is the only plausible hope as far as I can see.


Like a Crocodile

Most amusing article about an Eph in finance in the last ten years? This one from December 2001 about Jimmy Lee ’75, one of the most important and successful bankers of his generation. Highlights:

“Jimmy is a relationship man” said Kohlberg Kravis Roberts & Co.’s Henry Kravis. “In fact I’m having breakfast with him in a few days. Most relationship bankers are like concierges. Jimmy comes up with solutions: He is a full-fledged investment banker.”

Last week, at a leadership conference in midtown, striding back and forth across the stage, Phil Donahue-style, the 49-year-old Mr. Lee, well under 6 feet, seemed much the smaller man than his suspender-snapping, deal maker image. His thinning gray hair was cut short, and he was attired in the most conservative of blue bespoke suits. A chunky gold ring glimmered as he waved his hands under the lights.

“At the time I’d been running our business in Australia,” Mr. Lee said, relating to a new audience that moment when he had stopped being a Wall Street drone and instead started his ascension in the syndicated loan business. ‘I didn’t like my job or my boss. I knew, too, that there was this guy Bill Harrison at the bank who was an up-and-comer. One August morning in 1982, I just walked into his office and said, ‘My name is Jimmy Lee. You don’t know me, I don’t know you very well, but I don’t like my job or my boss and I want to work for you.'”

The story is revealing in a number of ways, as it speaks to Mr. Lee’s notorious infighting skills and his ability to cultivate those mightier than he.

Soon after he was appointed managing director at the bank in 1988, he began wearing the famous dollar-sign suspender. For his 40th birthday, he bought himself a Shelby Cobra; he grew his hair long, letting it flair, Michael Douglas-like, over his ears and touching it up with a bit of gel.

And then there was the trail of bosses he left in his wake, although his ultimate boss, Mr. Harrison-now J. P. Morgan Chase’s C. E. O.-has always been a fixture in his life. Indeed the joke has always been that the shortest job on Wall Street is being Jimmy Lee’s boss. Mr. Lee just hated to lose. If it meant having to be a bastard every now and then to get there, so be it.

“Jimmy once said to me, ‘It’s not about money, it’s all about power,'” said one former colleague.

And last year he was paid more than $30 million in cash and stock to stay put.

Others counter that the leopard does not so easily change his spots. Said one former colleague, “Someone at Chase once said, Jimmy is like a crocodile: He sits there with his eyes just a bit above the water saying, oh yeah, come just a little bit closer .”

Question for our finance professionals: How much money does Jimmy Lee have? Note that, because he is not one of the top five officers of JP Morgan, the bank does not report his income even though he is almost certainly one of the top five money makers. Indeed, during the great credit bubble of the last 5 years, Lee has almost certainly done extremely well, even if doing so required a bit of brown-nosing and conceirging.

I assume that much of Lee’s compensation was in Chase and then JP Morgan stock, but I do not see him listed as a major holder in Bloomberg. Is that because the bank does not need to report his holdings on a Form-4 since he is just an employee and not an officer? My guess would be that his net worth is around $50 million, i.e, about what Chase Coleman ’97 and Andreas Halvorsen ’86 earned each month in 2007. Lee’s former boss Williams Harrison currently owns around $75 million in JPM while his current boss, Jamie Dimon, controls about $150 million.

Read the whole thing below.
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Legendary Brownnoser

Today’s reading assignment for the students in Frank Morgan’s MATH 373 is the recent New Yorker profile of Stephen Schwarzman. Excerpt, commentary and an appearance by legendary Eph banker Jimmy Lee ’75 below the break. Pictures too!

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People Familiar

Everyone catch the Eph in the lead story in the Wall Street Journal today on Citadel’s investment in E*Trade?

On Monday, Nov. 12, Kenneth Griffin was boarding a plane to New York when he received an urgent call from Joe Russell, a lieutenant at Mr. Griffin’s big hedge fund, Citadel Investment Group. Shares of online broker E*Trade Financial Corp. were plunging in value, and Citadel, a holder of E*Trade shares and debt, was losing money rapidly.

“We need to focus on this fast,” said Mr. Russell, Citadel’s head of credit investments, relaying word that an analyst report suggesting possible bankruptcy had sent shares of E*Trade reeling.

“Let’s go,” Mr. Griffin shot back, as he authorized a plan to begin buying up millions of shares of E*Trade.

Heroic hedge fund manager bestrides the world of finance, righting wrongs and buying distressed assets.

By late October, E*Trade had hired advisory firm BlackRock Inc. to assess the damage to its mortgage portfolio, according to a person familiar with the matter. And on Nov. 1, E*Trade’s Mr. Caplan made a key call: to J.P. Morgan Chase & Co. banker James B. Lee, also a bank vice chairman. “We need you to take a hard look at our options,” Mr. Caplan said, according to people familiar with the matter. By this time, Mr. Caplan had already retained longtime banker Jane Wheeler at Evercore Partners to work on a rescue plan.

That would be Jimmy Lee ’75, leading Eph banker of his generation. (Previous Lee posts here and here.) Who do you think these mysterious “people familiar” are and what is their motive for talking to the Wall Street Journal?

About a week later, on Nov. 9., Mr. Lee and a team of bankers flew to E*Trade’s Arlington, Va., offices to lay out the options. Two potential bidding groups were at the top of list. One was Citadel, and the other was the duo of brokerage firm TD Ameritrade Holding Corp. and private-equity fund J.C. Flowers & Co.

Also that day, E*Trade’s top executives huddled to assess their rapidly deteriorating mortgage portfolio. “We honestly can’t predict with any certainty where this is going anymore and we just shouldn’t even try to peg the bottom anymore,” a weary Mr. Caplan said to the executives. The firm then issued another profit warning and dismissed a top trading executive and members of his team.

Experienced finance people are wondering at this point about who is advising whom and how they are getting paid. Is Jimmy Lee getting paid by E*Trade? Whether or not a deal goes through? Does he need to split the fee with Jane Wheeler who is, fairly obviously, not a source for the story? Not being a banker, I am confused. Comments welcome from our Ephs in finance.

By the middle of November, the crisis was starting to wear on Mr. Caplan. The E*Trade executive, who lives on a sleepy tree-lined road in Bethesda, Md., took up temporary residence in New York on Nov. 9 and was working round the clock.

“I just really want this company to survive,” Mr. Caplan confided to J.P. Morgan’s Mr. Lee early last week. Mr. Lee, people familiar with the matter say, encouraged him to stay the course, telling Mr. Caplan, “You are doing the right thing.”

And, if you don’t do a deal, I don’t get paid! Or is that a cynical interpretation? Did JP Morgan get paid for this transaction? By Citadel?

But the best part is how a private conversation between Kaplan and Lee makes it onto the front page of the Wall Street Journal. You think Kaplan “confided” in Lee within earshot of anyone else? I’ll take the other side of that. I bet that only Kaplan and Lee know what was said, that one of them told their flunkies, those unnamed “people familiar,” to go talk to the Journal reporters. Was it Lee or Kaplan and, even more interestingly, why leak it?

Left as an exercise for the reader.


Couric, Jones and Lee

What does Jimmy Lee ’75 have in common with Katie Couric and Chipper Jones? A mention in the New York Times!

In addition to large paychecks, people like Katie Couric of NBC, the Atlanta Braves third baseman Chipper Jones and James B. Lee Jr., a J. P. Morgan Chase investment banker, have something else in common.

Under a proposal by the Securities and Exchange Commission, their entire pay packages may be made public, along with those of the senior executives at the companies where they work.

Buried in the proposed reporting regulations – the most significant overhaul of compensation disclosure rules in more than a decade – is a change in whose pay packages companies will now have to make public.

Current rules require that companies disclose the compensation of the chief executive and the next four highest-paid executives in management. The new rule, which is expected to be adopted in a few months, will require companies to disclose the pay, severance, bonus, stock and option grants, and retirement packages of the chief executive, the chief financial officer, the next three highest paid executives – and as many as three other employees who receive more than any of the first five.

The proposal permits companies to omit the identity of any the three highly compensated employees and simply list their job titles. But it is likely to sweep in stars like Ms. Couric, Mr. Jones and Mr. Lee as well as highly successful bond traders, top salesmen, studio heads, financiers and athletes.

Of the three, I would wager that Lee is paid the least, but we will know soon enough. The Alumni Office will be more than a little interested. And, to counteract my reputation as a rightwingnut, I’ll point out that my suggestion on how to deal with execessive executive pay is much more radical than any Democratic proposal.


Praise The Boss

James Lee ’75 — universisally known as “Jimmy” — got a brief mention in a New York Times article today on the soon-to-be completed merger of JP Morgan Chase and Bank One. Lee is one of the most senior and successful Ephs in finance and seems to play the roll of senior statesman, on occasion, at JP Morgan.

“The guy is a rock star,” said James B. Lee Jr., a vice chairman of J. P. Morgan Chase, as he recounted how Mr. Dimon helped land a big underwriting deal recently, even before the merger becomes official.

Lesson: It never hurts to say nice things about your new boss, especially when the New York Times is calling!

Their dinners finished, Mr. Dimon and Mr. Harrison stepped up to the lectern for a closing interview, conducted by Mr. Lee. “Tell us some personal things about yourselves, Jamie and Bill,” Mr. Lee said.

After a brief pause, Mr. Harrison talked about growing up in North Carolina, coming to New York, all the blind dates he went on before marrying at the age of 42 and how his daughters, 11 and 13, greet him when he arrives home in Greenwich, Conn: “Hey, Billy boy. How were things at the office?”

As the crowd roared with laughter, Mr. Dimon took his turn. He recalled the reaction of the eldest of his three daughters when he told her that he had been fired from Citigroup. “Can I have your cellphone now? I guess you won’t need it,” she said.

Lee is maried to Elizabeth (Brownell) Lee ’75 (or at least the alumni office has them as residing at the same address). As always, we are big fans of Eph marriages.

Given Lee’s success in finance, he becomes a candidate for the role of mystery donor for the new INSERT YOUR NAME HERE student center. Recall my guess that:

we want a very rich but not shy Williams grad from a not-wealthy family without a history of major gifts to the College, probably not a current trustee, perhaps approaching a major reunion.

Lee and his wife are coming up on their 30th reunion. Investment bankers like Lee are definately not known for their, uh, shyness. It is not clear if Lee is wealthly enough to be able to afford a $15 million donation. His compensation in 1999 (the last that I can find on Bloomberg News) was only $12 million. Then again, he seems to have received a $14 bonus for 2000.

More on Lee can be found here:

James B. Lee, Jr. is Vice Chairman of JPMorgan Chase & Co. and Chairman of the Investment Bank, North America. He is responsible for Morgan’s relationships with many of its most important investment banking clients and supervises many of their strategic transactions. He chairs the bank’s Commitment Committee, Conflicts Committee, Executive MBA Program, and its National Advisory Board. He is a member of the Executive Committee, the firm’s policy-making group. He also helped develop and run LeadershipMorganChase, the company’s leadership development initiative.

Mr. Lee joined Chemical in 1975 and held various assignments in specialist lending areas until 1980, when he established and ran Chemical’s merchant bank in Australia. In 1982 he started the bank’s loan syndications unit in New York, and went on to build and run Chemical’s and then Chase Manhattan’s investment banking business. He was named Vice Chairman of the firm in February, 1997.

He was named one of American Banker’s 1992 “Forty Top Bankers under Forty Years of Age.”

In another Williams connection, Lee makes a couple of appearances in Bethany McLean’s ’92 excellent Enron book, The Smartest Guys in the Room. Lee comes off quite well in a story with very few sympathetic characters. He both sensed early on that everything was not quite right at Enron and, mostly, avoided throwing good money after bad at the end.


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