Bear Stearns headquarters July 5, 2001 on Park Avenue in New York City.
Alan “Ace” Greenberg, who rose from a Bear Stearns clerk in 1949 to become the firm’s CEO in 1978, died Friday at 86. The cause was complications from cancer.
When he joined the investment bank, it was a little, scrappy company. It rose to become one of the industry’s biggest, but never lost its outsider image, until it nearly collapsed in 2008. JPMorganChase acquired the company at a bargain basement price, in one of the first moves of the impending financial crisis.
Ace Greenberg came from another era of Wall Streeters. He had no Ivy League degree. He was born in Kansas, and he grew up in Oklahoma.
“He liked to gamble, he liked magic, he liked bridge, and, of course, the only way to legally gamble at that time was to go to Wall Street,” says William D. Cohan, author of “House of Cards, A Tale of Hubris and Wretched Excess on Wall Street,” a book that chronicles the fall of Bear Stearns.
During his career, Greenberg’s trades made a lot of money, and by 1978, he was the boss, instilling in the company a culture both of risk taking and frugality, reusing envelopes and giving new employees welcome packets with a note and some supplies.
As former Bear Stearns trader Lee Munson remembers it, the note said, “You have 50 rubber bands and a box of paper clips, and use them wisely throughout your career at Bear Stearns because you’re not going to get any more.”
Greenberg stepped aside as CEO in 1993, making way for his successor, James Cayne. He had first met Cayne playing bridge.
“Bridgeplaying was the Facebook of their time,” says Cohan.
As Bear Stearns was starting to unravel in 2007, Cohan says Cayne was in communicado at a bridge tournament. And, he says Greenberg developed a grudge against his former friend and successor for driving the firm into the ground.
“That, of course, ignores Ace’s role in it because Ace was part of the firm’s DNA,” Cohan says.
Greenberg was on the executive committee when the firm was sold to JPMorganChase. Greenberg told host Kai Ryssdal on this program in 2010 that he didn’t have much influence by that point.
“I did what I could. I tried as hard as I could. Kai, you have to understand that I was a very very small shareholder of Bear Stearns during this period,” Greenberg said.
He told “Marketplace” that what he regretted most were all the Bear Stearns workers who lost their jobs in 2008.