Alan C. Greenberg, a risk-chasing Wall Street titan who
built Bear Stearns into a global investment-banking powerhouse and
presided over its collapse as America slid toward a calamitous recession
in 2008, died on Friday in Manhattan. He was 86.
The cause was complications of cancer, his son, Theodore, said.
Mr. Greenberg's nickname was "Ace," and he kept a deck of cards on his desk, ready to deal. He was a champion bridge player, a magician who conjured coins with sleight of hand, a showoff who could whiz-bang a yo-yo, an adventurer who played pool with sharks and stalked game in Africa.
That buccaneer spirit propelled him over five decades from Bear Stearns' stock room, where he began as a clerk in 1949, to trading floors, where he mastered moneymaking skills, and into the executive suite, where he became chief executive in 1978, chairman in 1985 and chairman of the executive committee in 2001.
Along the way, he led Bear Stearns on one of Wall Street's legendary roller-coaster rides, a climb to dizzying heights as one of the country's biggest brokerages, and a breathtaking free-fall into bankruptcy. Stuck with billions in all-but-worthless mortgage securities as its clients made a run on the bank, Bear Stearns was taken over by JPMorgan Chase in a $270 million fire sale sanctioned by the Federal Reserve.
The cause was complications of cancer, his son, Theodore, said.
Mr. Greenberg's nickname was "Ace," and he kept a deck of cards on his desk, ready to deal. He was a champion bridge player, a magician who conjured coins with sleight of hand, a showoff who could whiz-bang a yo-yo, an adventurer who played pool with sharks and stalked game in Africa.
That buccaneer spirit propelled him over five decades from Bear Stearns' stock room, where he began as a clerk in 1949, to trading floors, where he mastered moneymaking skills, and into the executive suite, where he became chief executive in 1978, chairman in 1985 and chairman of the executive committee in 2001.
Along the way, he led Bear Stearns on one of Wall Street's legendary roller-coaster rides, a climb to dizzying heights as one of the country's biggest brokerages, and a breathtaking free-fall into bankruptcy. Stuck with billions in all-but-worthless mortgage securities as its clients made a run on the bank, Bear Stearns was taken over by JPMorgan Chase in a $270 million fire sale sanctioned by the Federal Reserve.
Jonathan Fickies | Bloomberg | Getty Images
Alan "Ace" Greenberg in 2012
The failure, the first among several brokerages,
helped ignite Wall Street's meltdown, which dragged the nation into the
worst credit crisis since the Great Depression. Bear shareholders, whose
stock had traded at $170 in 2007, got $10 a share. Most of the firm's
14,000 employees lost their jobs, and some their life savings. Thirty
percent of the equity was held by employees, including many senior
executives who were wiped out.
Read More Bear employees contemplate a poorer future
Read More Bear employees contemplate a poorer future
But Mr. Greenberg, who had cannily cashed in his stake
over the years and had sold $50 million in Bear Stearns shares since
2007, emerged almost unscathed. And he signed a lucrative contract with
JPMorgan to stay on as vice chairman emeritus and take 40 percent of
trading commissions he generated. In early 2010, JPMorgan discontinued
the Bear Stearns name.
The Bear Stearns collapse in March 2008, six months before the recession struck with force, gave rise to recriminations, feuds, investigations and a tsunami of articles and books, including a Greenberg memoir, "The Rise and Fall of Bear Stearns" (2010, with Mark Singer), and "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street" (2009) by William D. Cohan.
Read MoreThe 12 types of people on Wall Street
The Bear Stearns collapse in March 2008, six months before the recession struck with force, gave rise to recriminations, feuds, investigations and a tsunami of articles and books, including a Greenberg memoir, "The Rise and Fall of Bear Stearns" (2010, with Mark Singer), and "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street" (2009) by William D. Cohan.
Read MoreThe 12 types of people on Wall Street
In his book, Mr. Greenberg, whose executive committee
oversaw risk when the firm's exposure to subprime mortgages peaked, put
much of the blame for the failure on James E. Cayne, a former protégé
who succeeded him as chief executive and chairman. Mr. Greenberg said
Mr. Cayne, who lost $900 million in the collapse, had ignored his
warnings that the firm was overleveraged.
Mr. Cohan's more detailed account portrayed Bear Stearns as relentlessly aggressive and Mr. Greenberg as its cultural godfather. Other analysts said his five-member executive committee had become so fixated on raising the firm's book value and stock price that it lost sight of its vast exposure to subprime mortgages, leading to a collapse that became a symbol, though not a primary cause, of the recession.
Mr. Cohan's more detailed account portrayed Bear Stearns as relentlessly aggressive and Mr. Greenberg as its cultural godfather. Other analysts said his five-member executive committee had become so fixated on raising the firm's book value and stock price that it lost sight of its vast exposure to subprime mortgages, leading to a collapse that became a symbol, though not a primary cause, of the recession.
He moved to New York, determined to make good on Wall Street. Lacking an Ivy League degree, he was rejected by five white-shoe firms. But Bear Stearns, open to aggressive novices regardless of background, made him a $32.50-a-week clerk. He lobbied for promotions and soon demonstrated remarkable trading skills. By 1958 he was a full partner, one of the storied clerks who became millionaires at Bear Stearns.
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