Like Images From Deep Within the Bowels of Abu Ghraib Prison

My impression is that the New York Times often produces master narrative scripts, which are sold to the public as news. When such a preordained process is started from scratch--let's say, like with the first Gulf War--it is unusually effective in creating a shared version of exoteric reality. But when the story writers are called in at the last moment for emergency repairs to an organic breach that threatens to expose more unpalatable truths than the public can adequately rationalize or deny, their efforts at containment seem forced, illogical, even sophomoric.

The Salomon Bros. bond-trading scandal that erupted in August 1991 was an epic challenge at information management. Certain facts had escaped in the opening days and weeks of the scandal, which couldn't be massaged into happy endings. Even with the sophisticated controls manifest in the infrastructure of government and finance as countermeasures, the very dangerous nature of what underpins our capitalist democracy very nearly sprang out into general awareness.

What's changed in the years since then is now the record of events which once received widespread attention can now be reexamined and studied by online layman with the aegis of Google, and I'd imagine, such a dynamic for analytic self-determination is unprecedented in so-called recorded history.

That history is constructed by a victorious few is exactly my point, and that sometimes it's schmaltzy.


____________________________________________________________________________

Below are excerpts, within excerpts...with further excerpts...

September 5, 1991, New York Times, Excerpts From Statement By Salomon to House Panel,

Following are excerpts from the statement submitted by Salomon Inc. with the testimony of its chairman, Warren E. Buffett, describing the key event that led to Treasury Department inquiries into the firm's bidding at securities auctions.

The people referred to are: Paul W. Mozer, former managing director in charge of the firm's government trading desk; Thomas Murphy, also a former managing director who assisted Mr. Mozer in managing that desk; Christopher Fitzmaurice, a trader; John W. Meriwether, former vice chairman; Thomas W. Strauss, former president, and John H. Gutfreund, former chairman and chief executive of Salomon. Also mentioned is Charles Jackson, a senior director of Mercury Asset Management.

On Feb. 21, 1991 . . . Mr. Mozer told Mr. Murphy that he had submitted an unauthorized customer bid in the name of "Warburg" to obtain the amount of notes Mr. Mozer wanted to purchase. . . .

At some point after the auction . . . Mr. Fitzmaurice answered a telephone call from a representative of the Treasury who was trying to reach Mr. Murphy. The Treasury representative inquired about the identity of the "Warburg" listed on the Feb. 21, 1991, bid placed by Salomon and wanted to know whether the entity in question was S. G. Warburg & Co., which, like Salomon, is a primary dealer.

["At some point after the auction" just won't do. My adrenaline would have gone through the roof after a phone call like that. The professional response would be to mark down the time and date in a calender and take notes of all the conversations. This would be called the "covering your ass stage," which even the not-guilty do before "lawyering-up." So it's clear, right off the bat, that this is not a professional communique between a supervisory House panel and subservient government agents, but probably the reverse.]

After being advised by Mr. Fitzmaurice of the Treasury inquiry, Mr. Murphy discussed with Mr. Mozer how to respond. . . . At Mr. Mozer's instruction, Mr. Murphy obtained information on the corporate structure of Mercury Asset Management Company. . . . Mercury and S. G. Warburg are both subsidiaries of S. G. Warburg P.L.C., but, unlike S. G. Warburg, Mercury is not a primary dealer.

[After the fact, they seek information about corporate structure, but first they submit a one-word bid to the Federal Reserve with the name of "Warburg."]

. . . Messrs. Mozer and Murphy agreed that Mr. Murphy would . . . advise a Treasury representative that the bid submitted in "Warburg's" name should have been submitted in the name of "Mercury." . .

Apparently unbeknownst to Messrs. Mozer or Murphy, S. G. Warburg had submitted a bid for $100 million in its own name in the Feb. 21, 1991, auction. In the view of the Treasury, as expressed in an April 17, 1991, letter . . . to Mercury [ with a copy to Mr. Mozer ] , Mercury's affiliation with S. G. Warburg was sufficient to require aggregation of S. G. Warburg's own bid with the unauthorized bid submitted by Salomon in the name of "Mercury" for purposes of the Treasury's 35 percent bid-limit rule. Aggregation of these two bids would have resulted in a bid by S. G. Warburg greater than the 35 percent of the offering amount. . . .

[First, it is my understanding that there is no 35-percent bid rule, but a 35-percent awards rule. It was Mozer's taking advantage of this as a tactic (one time bidding 300 percent of a total auction. See below.) that was considered "gaming" the system. Remember also that the Basham-Mozer rule was only enacted in late 1990 in response to his ongoing pattern of behavior. One would assume that a gentlemanly collegiality had prevailed untill then.]

[Now here's the rub! Nowhere are we told the size of Mozer's fraudulent Warburg order, but if a measly $100,000,000 tipped it over the line, then in a $12 billion auction, Mozer was bidding something on the order of $3.9 billion on the Warburg name. Wouldn't a bid of that scale draw attention to itself?]

[Why would Mozer use the name of a fellow primary dealer instead of some obscure customer's name? Since it is a requirement of primary dealers to "make markets" and bid at auction (at every auction?) such piggybacking would be prohibited on its face. Did Mozer think somehow that Warburg wouldn't attend the auction and bid? Where is the logic? Would Warburg be expected to pay a commission to Salomon for this effort? Furthermore, Mozer wasn't bidding on another firm's "name." He was bidding on Salomon's account and appending a meaningless appellation. It seems clear that even if the Fed had some requirement that bids be listed with pending orders--versus purchases for in-house "stock"--there is obviously no follow through to verify if sales and transfers were actually finalized, i.e. with the $1 Billion dollar "practical joke" order, or any of the other fraudulent orders placed by Salomon. (Writing "Warburg" in pencil on a slip pf paper doesn't indicate anything. Try going to a real auction for farm equipment and see how far that gets you.)]

[If the Fed was concerned that Warburg was wrongly or mistakenly segmenting their bid in some act of legerdemain (Oh, $4 billion plus $100,000,000 equals--really tricky maneuver there!) wouldn't that issue be addressed at the time of the bid openings? How else would they determine the awards? Why wait 54 days to write a letter?]

. . . Apparently concerned that the Treasury would learn from Mercury or S. G. Warburg representatives that neither of those entities had authorized Salomon's initial submission of a bid in "Warburg's" name, or its subsequent use of "Mercury" to identify the bid, Mr. Mozer contacted Mr. Jackson and told him that Salomon had mistakenly submitted a bid in Mercury's name in the Feb. 21, 1991, auction. Mr. Mozer requested that Mr. Jackson not embarrass Mr. Mozer with the Treasury and the Federal Reserve by responding to the Treasury's letter. (The letter itself did not ask for a response.) . . .

[So not only was the letter written 54 days after the fact, (and isn't it about time for another auction?) it had no discernable interrogative, admonishing or ministerial purpose.]

In late April 1991 . . . Mr. Mozer approached his supervisor, John W. Meriwether . . . and advised him that he had submitted an unauthorized bid in the name of "Warburg." Mr. Mozer also advised Mr. Meriwether that he had asked Mr. Jackson not to respond to the Treasury's letter. . .

[If Mozer and his underlings didn't take the matter seriously enough to note the time and date of the phone call, wouldn't you think when that when the issue is raised to the attention of their superior, Mr. Meriwether, that one of them would have taken notes? But asking for a professional response is hard when one key aspect of your defense is that you consummated an $1 billion order as a result of a practical joke gone awry. This is supposed to be a submission to the Goddamn Congress and approximating "late" April, is the best they can do?]

Mr. Meriwether told Mr. Mozer that the matter was very serious and represented career-threatening conduct. Mr. Meriwether asked Mr. Mozer whether unauthorized customer bids had been submitted on other occasions. Mr. Mozer told Mr. Meriwether that the Feb. 21, 1991, Warburg/Mercury incident was the only time that an unauthorized customer bid had been intentionally submitted by the government trading desk. Mr. Mozer did not advise Mr. Meriwether that he had submitted a second unauthorized customer bid . . . in the name of "Quantum" in the same . . . auction. Mr. Meriwether told Mr. Mozer that he would have to bring the matter to the attention of Thomas W. Strauss, then Salomon's president. Mr. Mozer asked Mr. Meriwether not to do this.

[Again with the "customer bids," authorized or unauthorized, "in the name of shit." They act as if the outside world doesn't know the leeway a wholesaler has. But if this is the case, why not just be a customer of the Treasury or the Fed itself, and save yourself the $5 million a year bonus Mozer is paid as gatekeeper?]

Mr. Meriwether promptly met with Mr. Strauss, who asked Donald M. Feuerstein, then Salomon's chief legal officer, to join the meeting. Very soon thereafter, Messrs. Strauss, Meriwether and Feuerstein met with John H. Gutfreund. . . . Messrs. Gutfreund, Strauss, Meriwether and Feuerstein have stated that they decided that Mr. Mozer's conduct should be reported to governmental authorities and discussed how this should be done. They have also stated that no final decision was made concerning the manner in which the matter would be reported to governmental authorities. As this committee is aware, governmental authorities were not notified until August 1991. As Warren Buffett has stated, the delay in reporting remains "inexplicable and inexcusable."

[Some important people lost their positions (jobs) because of their inability or unwillingness to explicate the thinking behind the non-reporting, but to copy a letter to the Times containing such a vapid degree of pointlessness is, well, just sad. Then, with one last, final, imprecise August 1991 we can know they were canned for bad playacting, with the real center of gravity not in the Congress but some phantom nursery school nanny.  Too bad the PR grownups couldn't get a semblance of logical realism into this laughably put together narrative.]

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August 17, 1991, New York Times, Quotation of the Day

"We cannot let our unfortunate mistake of not taking prompt action, when in April we learned of one unauthorized bid at a February Treasury auction, to harm the firm. We are taking this action to protect the firm, its 9,000 people and its clients." -- John H. Gutfreund and Thomas W. Strauss, announcing they would resign the top positions at Salomon Brothers. [ 1:3. ]

Lie to the Congress. Lie to the S.E.C. Lie to the Federal Reserve. Lie to the Justice Dept. Lie to the public. Lie to me. Eventually, when the full run of news accounts is assembled, and we can chart every nook and cranny and outpost of deceit, we will see how venal the story really is. This is a Failed State.

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OK, I may stand corrected, but probably not. The very early dated Boston Globe article posted below, Salomon will suffer in scandal, by Forbes national editor Robert Lenzer, contains a rash of details of the kind that are absent once the press goes to the mattresses in support of their favorite financial Don Buffett. (while the New York Times stands in the garden dusting the tomatoes) Some interesting facts:

• Salomon was able to buy $1 billion of Treasury notes for $10 million down, a 1 percent margin that is unavailable to the ordinary investor.

Who pays the costs for this special privilege? Probably the federal taxpayer.

• five firms (share) half the $800 million pretax profits from 1990 Treasury trading.

I'm assuming this refers to profits on the original issue and not the secondary market. If so, the cost is as ruinous as the 19 cents of every medical-care dollar spent to support the insurance industry. Mozer's bonus schedule for his last three years at Salomon was absurdly irrationally. He was Master of the Mundane. How difficult can it be to sell something everybody wants to buy? So the system as it stands now is a total giveaway; a function of class power and control; an example of Wall Street Welfare of the Worst Weft and Warp!

• The Treasury, which hasn't the manpower to supervise the market, has let dealers carry their derivative positions books in offshore subsidiaries.

That fact simply leaves me stunned. But since a Crime of Salomon's was that it

• misrepresented the size of its positions and falsified its books and records. 

can some books be kept in the Cayman Islands but others must be "squared" with the Fed? What good is an originating or overt position if derivatives can undermine it to the thousandth decimal point?

In the May 22 auction for a $12.26 billion issue, Lenzner says that after Solly had bought in the half-billion range for their house account, "Salomon bid as agent for two well-heeled clients for another $6 billion in notes, bringing the group's total position to 85 percent." Now, individual purchases of that caliber can't be common, so what are the probabilities that two $3 billion sales would go on together using the same primary dealer as agent? These rich privates wouldn't get the same one-percent margin privilege, so absent using their dealer's rights, what's the point of paying a commission on $3b? Why not buy directly from the house? But since every aspect of the process is designed to promote the utmost secrecy and confusion, maybe that's worth the price.

In the February 1991 sale of $9.04 billion five-year notes, Salomon was guilty of

"forging customer orders. In both instances Salomon's written bids to the Federal Reserve Bank in New York, transmitted electronically, were misrepresented as well, the sources said." 

Not a very secure system, but then it's a club that works on the "honor system." The parties who should be aggrieved by Salomon's taking an unfair share of the pie are the other 39 primary dealers, but we never hear a word out of them. In fact, the man at Warburg, Charles Jackson, goes along with the deception when first contacted by the Treasury.

An amazing publication is the following Washington Post article from May 31, 1991, which lays out all the issues, hearsay and gossip. It even attempts to blame George Soros' Quantum Fund for the squeeze being felt, when Salomon had apparently used the name as a ploy (We'll never know for sure, will we?). Who among the 40 primary dealers would be caught short in such a structured set up and then keep quiet about it? The ones hueing-and-crying are the one's caught out there. For Gutfreund to have kept his knowledge of Salomon wrong-doing a secret over the period of May, June and July, (while acquiescing to further wrong-doing in May) meant he and the other leadership either don't read, don't think the rest of us read, or, third, the option I believe to be true, Gutfreund never conceived that he would be the one caught up in a "short" position. He relied on an established conspiratorial network so vast, powerful and corrupt that it naturally includes all the 39 primary dealers, (what good is a 35% limitation. Haven't you ever seen three guys talking in a corner?) but also all the Fed and Treasury officials with line responsibility over their common function and affairs.

A good question ask to divine this theory into action is: what do you think becomes of all the fines and disgorgement used to "punish" these bad boys? Think it goes into the general treasury for the benefit of the taxpayer? No--it's used the flush the system and ensure the next round of willing pawns, victims, heroes and scapegoats.
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May 31, 1991, The Washington Post, Fed Studies Possible Squeeze On Sale of Treasury Securities; 'Short-Sellers' Rumored to Face High Costs, by John M. Berry,

The Federal Reserve yesterday was trying to determine whether a large portion of two recent $12 billion issues of Treasury notes has ended up in the hands of a few owners who may now be demanding a premium for selling or lending the securities.

According to widespread rumors in financial markets, such a maneuver is occurring, squeezing dealers and investors who need to acquire the two-year Treasury notes to cover "short" market positions.

The Fed has a big stake in assuring an open, orderly market in government securities, which it buys and sells constantly to influence the course of the economy.

If the Fed detected a squeeze was in process, it could bring strong pressure on the participants to stop. However, in the lightly regulated government securities market, carrying out such a squeeze would not normally be illegal, officials at several securities dealers said.

A short sale occurs when an investor who believes the value of a security that he or she does not yet own sells it, expecting its value to fall. Initially, the short seller may borrow the security from someone else so he or she can deliver it to the buyer. If all goes well, the investor will replace the borrowed security by buying it at a lower price in the market.

As a result of the apparent squeeze on the Treasury notes, there were few sellers but plenty of buyers, a condition that has pushed yields on the notes about 0.15 percentage points below what they otherwise would be, analysts said.

Similarly, holders of the notes, who were using them as collateral on loans, were able to borrow at favorable rates from investors who needed to obtain the securities to cover a short position. The holders were paying as little as 1 percent to 4 percent interest rates on such loans. In contrast, transactions of that type, called repurchase agreements, that involved other government securities were paying about 5.8 percent yesterday.

Speculation on the identity of the note holders centered on George Soros, manager of an aggressive hedge fund, the Quantum Fund.

The rumors also indicated that Salomon Brothers Inc., one of the largest of the major dealers in government securities, was involved, presumably acting on Soros's behalf.

According to Dow Jones Capital Markets Report, Soros and Salomon Brothers declined to comment on the rumors.

A spokesman at the Federal Reserve Bank of New York said that officials there were "asking questions" about the circumstances surrounding the two-year notes but that they did not consider it to be an investigation.

The yield on the two-year notes "is definitely out of line" with what it normally would be given the yields on other Treasury securities, said a senior official at one government securities dealer.

On the other hand, he added, the 0.15 percentage point involved is "not way, way out of line. This is a good issue to own on its merits," he said.

While it was unclear exactly how the apparent squeeze developed, an official at another major dealer said that it was quite possible for one or more investors to gain leverage over an issue by putting up only $100 million to $200 million.

With such a stake, the investor, working though a dealer, could spread offers to buy several billion dollars worth of the notes among several other dealers. Those dealers, unaware of what was in store, would agree to sell the desired securities. Likely, they would have only a portion of what was sold already in their own inventory and would plan to buy or borrow the rest.

But if the investor setting up the squeeze acquired enough of the available supply, the only source from which the dealers who were short could obtain the notes would be the investor to whom they had sold them in the first place.

Such a transaction is not without risk to the original investor, however. If interest rates rose suddenly, the investor would face a capital loss since the value of the notes would fall as rates rose. In addition, the investor would also have to pay higher rates on the money he borrowed to purchase the notes in the first place.

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August 15, 1991, The Boston Globe, Salomon will suffer in scandal, by Robert Lenzner,

NEW YORK -- Salomon Brothers, one of the bully boys of Wall Street, pushed too hard this time. It has broken the rules that block a single trader from controlling the monthly auctions of Treasury bonds, by which the United States raises money. Although investors were not hurt, the integrity of the huge Treasury market has been damaged.

Salomon, which since 1917 has raised more money for Uncle Sam than any other registered Treasury dealer, has admitted violating the 35 percent position limit in five Treasury-note auctions since last December.

Even worse, sources say Salomon misrepresented the size of its positions and falsified its books and records. These problems are certain to bring costly fines, private lawsuits and action by the Securities and Exchange Commission. Additionally, Salomon says the irregularities may result in "censure, suspension or debarment from acting as a broker-dealer and as a primary dealer in government securities."

Salomon also says legislation currently under consideration, if enacted, "would have an adverse impact on Salomon's business."

Potentially more troubling would be a Justice Department indictment charging Salomon with trying to "rig," or monopolize the Treasury market. It may well bring the $120 billion-a-day government securities market under increased regulation and change the rules of the game for Salomon and its competitors.

In a confession highly unusual on Wall Street, chairman John Gutfreund, President Thomas Strauss and Treasury bond manager John Meriwether admitted last night they knew of the irregularities in late April and did not take any action until July. A special committee of outside directors will be formed to review these irregularities.

The scandal is a jarring setback for Gutfreund's game plan to return Salomon to its mid-1980's prominence as Wall Street's leading trading firm. The firm earned a record $451 million for the first six months this year. It recently scored a major coup by managing the $3 billion Time Warner Inc. rights offering and was chosen as British Telecom's banker.

Nevertheless, rot at the heart of Salomon's core business could be costly. The firm's in-house investigation has only reviewed Treasury auctions back to December 1990. If there is a more extensive pattern of fraudulent trading, the firm's standing in the global financial community could be damaged. Salomon's franchise was built on trading Treasuries and its reputation has been unsullied until now.

Astutely, Salomon wants to clean up its act before the government does. Salomon has discovered that before the May 22 auction of 2-year Treasury notes it purchased $497 million in the when-issued market -- that is, a promise to buy securities after they are issued. Then the firm for its own account bid for 35 percent of the $12.26 billion issue. Another $500 million transaction, which may be Salomon's doing, brings the firm's position to the 44 percent level, an "inadvertent" violation, the firm says.

At the same time Salomon bid as agent for two well-heeled clients for another $6 billion in notes, bringing the group's total position to 85 percent.

This substantial position by Salomon and others in a Treasury-note issue raised havoc with other Treasury dealers who sold bonds short before the auction and lost a bundle of money scrambling to buy them back. Salomon and its two clients did not make it easy for other dealers by holding onto their note positions, rather than distributing them into the market. This behavior led traders to charge Salomon with trying to "squeeze" or "corner" the market in this issue. The only saving grace was Salomon's 6.82 percent bid, which saved the US government $25 million.

If the May auction was a crude power play that got out of hand, at least two earlier fundings involved Salomon's falsifying purchase orders, sources say. In December 1990 Salomon bid in its own name for 35 percent of the $8.57 billion auction of four-year notes. It also bid for another large order in the name of clients who hadn't authorized the transactions. Salomon traders falsified these purchase orders, and the subsequent sale orders, whereby Salomon repurchased the notes from the clients at the original issue price, sources say.

Then, in February 1991, Salomon made a similar play, buying substantially more than 35 percent of the $9.04 billion sale of five-year notes by forging customer orders. In both instances Salomon's written bids to the Federal Reserve Bank in New York, transmitted electronically, were misrepresented as well, the sources say. Tom Murphy, the two managing directors in charge of Treasury trading. Their attempt to control the auction process, and make a killing, may have been motivated by Salomon's generous year-end bonus plans.

Unfortunately, this pressure forces traders to take gigantic risks with shareholders' money. Huge leverage and declining interest rates make the Treasury market one of Wall Street's most competitive but profitable arenas. Salomon was able to buy $1 billion of Treasury notes for $10 million down, a 1 percent margin that is unavailable to the ordinary investor. Then it borrowed $990 million at an interest rate 150 basis points less than the interest earned by holding the notes.

This "positive carry" -- borrowing at 5.75 percent and earning from 6.90 percent to 7.30 percent -- made buying Treasuries an odds-on play. When the return is figured on a small down payment and annualized, it's considerable. Even better, Treasuries in short supply might rally and be sold at a profit.

Salomon's fiddling will renew congressional fervor about regulating the huge government securities market, where price data and position size are not available publicly. The Treasury, which hasn't the manpower to supervise the market, has let dealers carry their derivative positions books in offshore subsidiaries. The SEC would apply much tougher capital charges on positions.

Before this pressure to maximize profits, Salomon used to ask the Fed's permission before subscribing to 30 percent of a new issue. But those polite times are a relic.

Salomon's domination of the Treasury market was tested by brutal competition in the 1980s, when daily average trading rose from $28 billion in 1981 to $118 billion in 1990. Severe overhead reductions in fixed-income trading helped five firms to gain half the $800 million pretax profits from 1990 Treasury trading.

Now, the tarnishing of its reputation alone will cost Salomon dearly.
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See how the game was played  thirty years before...

August 29, 1962, New York Times, Effort To Corner U.S. Bills Hinted; Treasury Says Particularly Large Amount of 91-Day Issue Sought at Sale; Dillon Invokes a Limit; Bid at Auction Last Monday Believed Biggest Ever-- Bidder Undisclosed, by Albert L. Kraus,
An attempt may have been made this week to corner the floating supply in the weekly Treasury bill auction...

August 30, 1962, New York Times, Morgan Guaranty Denies Move To Corner 91-Day-Bill Auction; Bank Denies Bid To Corner Bills, by Edward T. O'Toole, [Section Business & Finance, Page 51]
Morgan Guaranty Trust Company admitted yesterday it was the big bidder in Monday's Treasury bill auction but denied it was attempting to corner the short-term securities market. The bank had submitted a bid for $650,000,000 of the $1,300,000,000 in ninety-one-day bills that the Treasury auctioned last Monday.

September 2, 1962, New York Times, Demand Is Heavy For 91-Day Bills; One of Largest Bids Ever Is Received at Auction; Demand For Bills Continues Heavy, by Albert L. Kraus, [Section Business & Finance, Page 77]

A little before 1:30 P.M. last Monday, a messenger from the Morgan Guaranty Trust Company of New York hurried across the marble foyer of the, Federal Reserve Bank of New York and thrust a sealed envelope through a teller's wicket.

________________________________________________________________________________

Just what any man could use: a moral endorsement from Henry Kissinger --

"When you read these stories, you say, 'How could this happen?' " said Henry Kissinger, who has known Gutfreund for more than a decade. "It is inconceivable to me that John Gutfreund would do anything at the edge of legality or morally wrong."

***********

An October 3, 1991, New York Times article, Additional Salomon Violation, by Kurt Eichenwald, says that
it was

In July 1990, after Mr. Mozer was said to have bid $15 billion at an auction of $5 billion in securities, Michael E. Basham, a Treasury Department official, revised the rules to restrict bids, as well as awards, to 35 percent of the overall auction.

but that the illegal bidding began a month before, in June, 1990

In a statement, Salomon said it "believes that the submission of unauthorized customer bids by its government trading desk did not begin until the Treasury, in late June 1990, raised questions about the size of the bids made by Salomon for its own account."

The investigation found that the illegal bidding began after June 1990, when the Treasury Department clamped down on Salomon's excessive bidding in the market. It linked the series of violations to rules imposed by the Treasury to limit the amount of securities an individual firm could bid for in an auction.

In further confusion, Mr. Eichenwald reports that the investigation reviewed 68 Treasury auctions in which Salomon and its customers had placed "about 1,000 auction bids"

Salomon said its internal investigation of the government desk had reviewed 68 Treasury auctions.

snip

The firm said it examined about 1,000 auction bids by Salomon and its customers and tens of thousands of trades in the securities that occurred up to 15 days after the auction.

Could there really be that many bids per auction? If Salomon did submit many small itemized customer bids per auction, what would happen if the Fed only allocated a partial award of bonds, as in this scenario...

People who work with Salomon said the firm's internal documents indicated that a $2 billion bid had been submitted in the customer's name. But Fed documents showed that a $3 billion bid had been submitted, and $600 million of securities had been awarded. The Salomon records showed, however, that only $400 million of securities had been allocated to the Salomon customer.

I'm not feeling very partial to Mr. Kurt Eichenwald right now anyway because of the following paragraph, where he deliberately "included" only a partial list of firms who had been victimized, if you will, be the misuse of their identities on bids, orders and purchase contracts

People working with the firm said the newly disclosed bid involved a customer whose name had already been disclosed as one that Salomon had used improperly. They declined to offer more details. The customers whose names were used without authorization in other auctions included the S. G. Warburg Group, the Tiger Management Group and the Pacific Investment Management Corporation.

Why wouldn't Eichenwald include George Soros' Quantum Fund when that name had been published in the Times just the month before, on September 5th? You'd think they'd want to include a celebrity's brand name in order to sell newspapers. GEORGE SOROS SCARRED FOR LIFE BY SCHEMING AUCTION DEBACLE!  Instead we're treated to a mush of minutia, which is sure not to cross-reference when I get around to it.

And who is it that conducts and oversees these auctions, the Treasury or the Fed? All the parts are interchangeable. 

I made this with sugar cubes and my glitter gun this afternoon!

More Deryck Maughan

April 12, 1991, San Francisco Business Times, Salomon picks Bay Area exec for Japan office. (Bill Thompson new president of Salomon Brothers Asia Ltd.) by Clifford Carlsen,
September 11, 1992, The Business Journal (Serving Greater Tampa Bay) Salomon Inc. (Proxy Report Excerpts) (1992 Financial Briefs of Public Companies in the Tampa Bay Area) (Company Profile)
September 17, 1993, The Business Journal (Serving Greater Tampa Bay) Salomon Inc. (proxy report excerpts) (Company Profile)
Friday, April 21, 1995, San Francisco Business Times, Don't panic: some CEOs are worth a fortune. (executive compensation) by Frank Glassner,
August 1, 2000, Investor's Business Daily, Citigroup Web head Horowitz quits,
November 15, 2000, Reuters / Investor's Business Daily, Business Software: Oracle, Citigroup Give B2B Stocks A Boost,
December 12, 2000, BusinessWorld (Philippines) Oracle, Citigroup in global alliance for e-commerce,
October 2, 2002, The Daily Deal, Citigroup names new COO, by Heidi Moore,
October 16, 2002, Jiji Press, Japan, U.S. Biz Leaders to Discuss Japan's Bad Loans,
March 6, 2003, FT Investor (Stories) UPDATE 1- Citigroup revamps top of banking division,
May 23, 2003, Bank Marketing International, Citi, HSBC go head-to-head,
June 19, 2003, The Asian Banker Journal, Citigroup names head of GCIB in EMEA,
July 17, 2003, The Daily Deal, Citi's Weill hands crown to Prince, by Heidi Moore,
February 23, 2004, Agence France Presse, Citibank acquires SKorea's Koram Bank,
February 23, 2004, Asia Pulse, Citigroup to Buy Out Koram Bank for US$2.73 Bln,
February 29, 2004, The Asian Banker Journal, Korea: Citigroup to acquire KorAm Bank for $2.73 billion,
February 29, 2004, The Asian Banker Journal, Citigroup restructures its corporate and investment banking group,
March 31, 2004, The Asian Banker Journal, Citigroup names chairman and CEO of Latin America and Mexico,
May 26, 2004, FT Investor (Pulses) GSK unveils Sir Christopher Gent as new chairman,
May 31, 2004, The Asian Banker Journal, Jap: Citigroup named chief executive officer,
June 21, 2004, Jiji Press, (Update) Citigroup to Cut Stake in Nikko Cordial to 12 Pct.,
June 22, 2004, Asia Pulse, Japan's Nikko Cordial, Citigroup to Keep Seeking Joint Projects,
October 21, 2004, The Daily Deal, Movers & shakers: Oct. 21, 2004, by Baz Hiralal,
October 21, 2004, Investor's Business Daily, Japan flap pushes out Citi execs,
October 25, 2004, The Daily Deal, Small is beautiful, by Heidi Moore,
October 30, 2004, The Spectator, The Great Presidential Stakes turns into a trillion-dollar handicap,
by Christopher Fildes,
October 31, 2004, The Asian Banker Journal, Financial Institution,
November 13, 2004, Jiji Press, Japan, U.S. Biz Leaders to Discuss Chinese Economy,
November 15, 2004, Jiji Press, Japan, U.S. Biz Leaders Ask for China Transparency Measures,
November 25, 2004, Private Banker International, Citi closing trust bank in continuing Japan wealth implosion,
December 31, 2004, The Asian Banker Journal, Who, What, Where,
September 28, 2005, Finance Week, Reuters appoints Maughan as non-executive director,
October 2, 2006, AFX Europe (Focus) BlackRock, Merrill unit close merger,
October 2, 2006, AFX CNF, GlaxoSmithKline PLC - Director/PDMR Shareholding,
February 12, 2007, AFX CNF, GlaxoSmithKline PLC - Directorate Change,
January 27, 2012, Pharma, GlaxoSmithKline says several board members will not stand for reelection,
January 27, 2012, M2 Equity Bites, GlaxoSmithKline reports board changes,

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April 12, 1991, San Francisco Business Times, Salomon picks Bay Area exec for Japan office. (Bill Thompson new president of Salomon Brothers Asia Ltd.) by Clifford Carlsen,

SAN FRANCISCO -- When Bill Thompson takes over as president of Salomon Brothers Asia Ltd. June 1, he plans to begin testing himself in a new way, perhaps in preparation for bigger and better things down the line with the nation's largest securities firm.

Director of the San Francisco office of Salomon Brothers Inc. since 1982 and head of West Coast corporate finance since 1988, Thompson has risen in the ranks of the firm. But only now will he step up to run a relatively independent operating subsidiary.

With total assets of $5.1 billion and stockholders' equity of $483 million, Salomon Brothers Asia is the most successful American securities firm venture in Japan. As a measure of its success, last year Salomon became the first foreign securities firm to participate in a Japanese government bond syndication.

Recently Salomon, along with Morgan Stanley Group Inc. and Goldman, Sachs & Co. was among the first foreign securities firms to be granted permission to open banks in Japan.

"This is a very exciting challenge for me at this stage in my career and is a significant leap to a different level of dialogue within Salomon Brothers," Thompson said. "I will have the chance to run an entire business for Salomon, which is the culmination of an awful lot of things I have been exposed to."

Heading the largest foreign securities firm in Japan and overseeing offices in all major Asian financial centers, Thompson clearly has won a plum job. His predecessor, Deryck Maughan, is leaving after four and a half years to become a vice chairman of Salomon Brothers in New York and to head its worldwide investment banking business.

Maughan is widely credited for much of Salomon's success in Japan, and Thompson realizes he must shape a new strategy to adapt to current conditions and to consolidate the firm's position.

"The Japanese (stock) market took a 45 percent hit last year, and they are experiencing volatility they have never seen before," Thompson said. "Salomon Brothers has always been very innovative as creative technicians in the business, and we want to continue to develop that."

Thompson will move to Japan with his wife and two of his children, who will attend English-language schools there.

"My wife and I both love California, so the most difficult side of this was the personal issue of relocating to Japan," Thompson said.

________________________________________________________________________

September 11, 1992, The Business Journal (Serving Greater Tampa Bay) Salomon Inc. (Proxy Report Excerpts) (1992 Financial Briefs of Public Companies in the Tampa Bay Area) (Company Profile)

TRADED NYSE-SB

Seven World Trade Center, New York, N.Y. 10048 (212) 783-7000

Salomon Inc., through its subsidiary Salomon Bros., is one of the world's largest financial services companies. Earlier this year it opened a processing center in Tampa.

Annual Meeting: May 6, 1992

Auditor: Arthur Andersen & Co. For fiscal 1991, auditors cited trading irregularities reported by Salomon Bros. regarding U.S. Treasury securities in giving a qualified opinion.

Market Statistics 

Common shares outstanding 113,000,000 

Per-share price $36.13 

Market value(*) $4 billion 

52-week high $37.75 

52-week low $20.75 

*Shares outstanding multiplied by current stock price
TABULAR DATA OMITTED

Officers, Directors & Shareholders

Officers: Warren E. Buffett, chairman; Deryck Maughan, CEO/Salomon Bros.; Andrew J. Hall, Gedale Horowitz, Donald Howard, James Massey, executive vice presidents

Directors: Dwayne Andreas, Buffett, Hall, Horowitz, Massey, Maughan, William May, Charles Munger, William Turner, Ernst Weil, Lord Young of Graffham, Robert G. Zeller

Significant Shareholders: Berkshire Hathaway, 100%, Series A Preferred; Dart Financial, 6% common

 
Executive Compensation (cash) 
Andrew Hall, exec. V.P.                              $1,575,614 
James Massey, exec. V.P.                              1,288,000 
Ernst Weil, exec. V.P.                                1,108,000 
John Macfarlane, treasurer                              958,000 
Deryck Maughan, CEO                                   1,234,500 
All executives (13)                                  $8,420,005 

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September 17, 1993, The Business Journal (Serving Greater Tampa Bay) Salomon Inc. (proxy report excerpts) (Company Profile)

Salomon Inc., through its subsidiary Salomon Bros., is one of the world's largest financial services companies. It is a major employer in Tampa, where it operates a processing center. 

Annual Meeting: Last held Mary 5, 1993.

Auditor: Arthur Andersen. For fiscal 1992, auditors gave an unqualified report.

 
 
     Market Statistics 
 
Common shares outstanding    110,194,747 
Per-share price                   $49.38 
Market value(*)             $5.4 billion 
52-week high                         $50 
52-week low                       $32.38 
(*) Shares outstanding multiplied by current stock price 

Officers, Directors & Shareholders

Officers: Robert Denham, chairman, CEO; Andrew Hall, Gedale Horowitz, Donald Howard, James Massey, executive vice presidents; Deryck Maugham, chairman, Salomon Bros. Directors: Dwayne Andreas, Warren Buffett, Denham, Hall, Horowitz, Massey, Maughan, William May, Charles Munger, William Turner, Ernst Weil, Rt. Hon. Lord Young of Graffham.

Significant Shareholders: Berkshire Hathaway, 100% Preferred Series A; Dart Financial Corp., 7%. common.

 
 
  Executive Compensation (cash) 
 
Robert E. Denham, chairman                 $999,434 
Andrew Hall, executive vice president     1,138,000 
John G. MacFarlane, treasurer             1.188,000 
James Massey, executive vice president    1,138,000 
Deryck Maughan, chairman, Salomon Bros.   1,997,690 

[TABULAR DATA OMITTED]

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Friday, April 21, 1995, San Francisco Business Times, Don't panic: some CEOs are worth a fortune. (executive compensation) by Frank Glassner,

Compensation is an emotional issue at any level of corporate hierarchy. But at the top, it can border on hysteria.

Astronomical earnings by top executives evoke a full range of emotions - from hero worship, to disgust and moral outrage - from shareholders, the business community, the media and the general public.

Most of the disgust in the 1995 proxy season has come from shareholders who are justifiably not amused by the performance of executives at companies like W.R. Grace, Boise Cascade or Morrison-Knudsen.

In fact, shareholders, led by institutional investors, have put CEOs on notice that if they do not increase the value of their shares, they'll be punished. Observe the fate of Joseph Antonini, CEO of K-Mart, Who recently lost his chairman's title and then was forced out of the company by activist shareholders.

Retribution also shows up in the paycheck as Salomon Brothers' CEO Deryck Maughan can attest: His salary and bonus pay were slashed 87 percent this year from 1994.

Directors also have felt the sting of shareholder disdain as W.R. Grace discovered when a new slate of directors was proposed by investors following revelations of executives' undisclosed expenditures and perks. And, of course, there have been lawsuits aplenty against directors at numerous companies.

The good new is, the system is changing: It's becoming more rational, investor-driven and most important, it is beginning to really link executive pay to company financial performance.

On a macro level, this emerging rationality is being ushered in more quickly by expanded SEC regulations that require fuller disclosure. The regulations are a fulcrum that directors can use as a basis of action in the interest of the shareholders they represent.

Until this year, the SEC rules - established late in 1993 - have had a less than momentous impact. But after having been in effect for one full business year, the 1995 proxy/annual meeting season should long be remembered as the "year of the compensation committee," as directors respond to the greater accountability imposed on them to fully disclose in proxies total executive compensation and to draw a clearer link between pay and performance.

Now, proxies will include specific factors used in determining the regular and incentive compensation of the CEO and the four other highest-paid corporate officers.

They also must link executive pay to company performance by requiring directors to draw a comparison between the return on the company stock over the past five years to both a broad. market index and an index of peer companies.

So, the system is supplying new checks and balances that previously were missing to keep executive pay marching in lockstep with company performance.

Conversely, a rational system also means that astronomical pay isn't necessarily out of order when results justify it. Take Michael Eisner who earned what has to be the world record of $203 million in 1993.

Yet, under his guidance, Disney's total market value rose to $2.2 billion from $23 million. Thus, a shareholder who paid $100 for Disney stock at the beginning of the Eisner era would now have a stake of $1,460. There was not one peep from investors regarding Eisner's compensation. He earned it.

Or take as another example Al Dunlap, a former protege of corporate raider James Goldsmith, who took the helm at Scott Paper Co. a year ago. He negotiated a contract in which he is paid $1 million a year plus another million-dollar bonus for each 10-point increase in the value of the company's stock.

He also managed to get Scott to pay $3.3 million for his Florida home. Too much money? No. Like Eisner, he earned it. Through massive restructuring and strategic divestitures he boosted Scott's stock price to more than $90 per share from $37.75 a year ago.

Within this emerging environment of rational compensation, directors walk a fine line. It is, after all, their job to attract top talent and they must de it in a way that is efficient, cost-effective and which satisfies the sensibilities and financial requirements of the shareholder.

As directors grapple with the complexities presented by the needs of these various constituencies, they can apply a few very general principles that can help in establishing true pay-for-performance programs. Generally speaking, executive compensation should be:

* Part of the management process.

* Linked to business plans.

* Tied to desired results.

* Designed to change/influence behavior.

In today's environment, an outstanding compensation program must also be flexible and adaptable to change.

Because of the hyperaccelerated pace of change in business and society, a program that is based on permanent, inflexible formulas or which is rigidly egalitarian, or which is never reviewed to ensure relevance, won't work.

A couple of specific techniques that compensation committees apply to maintain flexibility (read: control) include negative discretion in which directors can cut back awards according to preestablished goals. Another option is "bifurcated" plans that include both non-discretionary and discretionary elements.

As the "year of the compensation committee" unfolds, look for directors to seek shareholder approval for redesigned compensation programs that strengthen the link between executive pay and company performance.

This year, more than the past two, marks an end to hysteria in executive compensation. NoW, the rational element will hold sway in the boardroom.

Long live reason.

Glassner is CEO of San Francisco-based Compensation Design Group.
____________________________________________________________________

August 1, 2000, Investor's Business Daily, Citigroup Web head Horowitz quits,

Finance

Citigroup Web head Horowitz quits as losses mount at e-Citi think tank.

Ed Horowitz is quitting amid growing criticism of the unit he ran, the e-Citi Internet think tank division. Horowitz, who previously ran Viacom's interactivemedia arm, will be replaced by Citigroup Vice Chairman Deryck Maughan. The appointment of Maughan, who comes from Travelers Group, is one of Citigroup CEO Sandy Weill's lieutenants, underscoring an increasing role Weill is playing at the financial services supermarket.

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November 15, 2000, Reuters / Investor's Business Daily, Business Software: Oracle, Citigroup Give B2B Stocks A Boost,

PALO ALTO, Calif. (Reuters) - Financial services giant Citigroup Inc. on Tuesday unveiled a partnership that integrates the two companies' technologies and services.

Oracle shares shot up 3 5/8, or 15%, to 28 3/8 on Tuesday, after the companies said Citigroup has agreed to use Oracle technology for its internal procurementprocesses.

Citigroup also will market Oracle's exchange services to its global suppliers and corporate customers via a co-branded Web site.

Oracle agreed to integrate Citigroup's payment and settlement systems, the companies said.

Larry Ellison, Oracle's founder and chief executive, called the deal with Citigroup, which has 100 million customers in 100 countries, a giant step for Oracle's business-to-business trading exchange platform.

"The world will end up with a few giant B2B exchanges - this is one of them," Ellison said. "Citigroup and its 100 million customers form the nucleus of a B2B exchange that should become one of the first of these global giants."

Welcomed On Wall Street

Wall Street welcomed the announcement. Besides Oracle's stock, shares of Oracle's rivals in the B2B sector also surged.

"Any evidence of success in procurement, supply chain or B2B markets will be greeted warmly," PMG Capital analyst Jeffrey Van Rhee said, pointing to weak results in those areas for the company's recently reported fiscal first quarter.

Van Rhee noted that Oracle's competitors, such as Siebel Systems Inc., I2 Technologies Inc. and Ariba Inc., had produced better results in those areas than Oracle.

The alliance also helps Oracle match competitors Commerce One Inc. and Ariba, which have struck similar deals with financial services companies.

Shares of Redwood City, Calif.-based Oracle fell more than 25% in the past two weeks amid concerns that its database revenue growth will slow and that it willtake time for large corporations to replace existing business applications software with Oracle's suite of products.

I2, Commerce One Jump

Oracle shares were the most heavily traded on the Nasdaq, with volume over 77 million shares.

Other B2B stocks - including i2, Ariba and Siebel - traded higher on Tuesday after several down days.

I2 shares rose 25 5/8, or 22%, to 143 1/4, recouping much of its losses over the four previous sessions. Ariba shares rose 7 3/8, or 8%, to 98 3/4.

Commerce One saw its shares rise 7 3/8, or 14%, to 59 3/16. And Siebel's sharesjumped 6 3/16, or 7%, to 94 1/8, in what was a generally good day for tech stocks.

Citigroup's stock was up 1/4 to 50 3/4 on the New York Stock Exchange. That's off its 12-month high of 59 1/8.

"Citigroup is moving ahead on its Internet strategy to provide a suite of comprehensive products including payments and financial services to consumers and corporations," Vice Chairman Deryck Maughan said.

"We are also focused on using Web technology to improve our productivity and cut operating costs." he said.

_______________________________________________________________________

December 12, 2000, BusinessWorld (Philippines) Oracle, Citigroup in global alliance for e-commerce,

Oracle Corp., one of the the largest providers of software for e-business, signed a strategic alliance agreement with Citigroup, the global financial services company.

Under the terms of the agreement, Citigroup intends to integrate Citibank's payment and settlement capabilities into Oracle's market exchange, transact Citigroup's internal spending through Oracle's open marketplace OracleExchange.com, implement the Oracle@Internet Procurement solution worldwide and market OracleExchange.com services to its corporate client base, a statement said.

The agreement also calls for Citigroup to embed its financial services into Oracle technology, including OracleExchange.com, using Citibank's CitiConnect(sm) integrated financial solution that allows business-to-business (B2B) participants to initiate settlement for goods and services online, at the time of the transaction.

"Citigroup is moving ahead with its Internet strategy to provide a suite of comprehensive products, including payment and financial services to consumers and corporations. We are also focused on using Web technology to improve our productivity and cut operating costs," said Deryck Maughan, vice-chairman of Citigroup and chairman of the Citigroup Internet Operating Group.

"This agreement complements our efforts to be the financial services engine on B2B marketplaces. Our customers will benefit from having access to Oracle's one-stop e-marketplace that automates the entire purchasing lifecycle, from obtaining product information through to settlement and payment," said Jorge Bermudez, executive vice-president, Citibank e-Business.

_______________________________________________________________________

October 2, 2002, The Daily Deal, Citigroup names new COO, by Heidi Moore,

Despite numerous troubles surrounding its dealings with telecommunications companies, Citigroup Inc. is still retaining tight ties with the industry: the financial services giant on Oct. 1 named Michael Masin, the president of Verizon Communications Inc., as Citi's new chief operating officer.

Masin takes over the job vacated by Charles Prince, the former general counsel of the group, who was named president of its Salomon Smith Barney unit two weeks ago. That appointment followed the ouster of former president Michael Carpenter.

One financial institutions group banker noted that the hire of Masin only adds more fuel to the fire of speculation about who will succeed Chief Executive Sanford I. Weill, 69. Weill has not indicated when or if he will step down from his throne at Citigroup, but Wall Street is nonetheless quick to guess which of his favorites may be successors.

Masin already is a Citigroup board member and a member of its two-week-old committee on corporate governance standards, which was formed in response to investigations into its research practices by New York State Attorney General Eliot Spitzer and several major regulatory bodies.

Masin also was the chairman of Citigroup's personnel and compensation committee. Masin will resign his Citigroup board seat along with his president and vice chairman positions at Verizon.

At the same time, Weill will depart the boards of both Verizon competitor AT&T Corp. and United Technologies Corp. Weill will leave his post at AT&T after the company completes its AT&T Broadband spin-off later this year.

Weill and Masin are longtime friends, and Masin joined the board of Travelers in 1997, before it became part of Citi.

Both Masin and Weill also sit on the board of legendary performance center Carnegie Hall, a relationship which holds a vaunted place in the Citi mythology. Travelers' $9 billion acquisition of Salomon was born because Deryck Maughan, then the head of Salomon, sat on the Carnegie Hall board with Weill, then the head of Travelers.

C. Michael Armstrong, the chief executive of AT&T and also a longtime friend of Weill, is still a member of Citigroup's board.

Also on Tuesday, AT&T made a set of concurrent announcements about upcoming management changes. AT&T announced that Armstrong would leave the company at the end of the year to become chairman of the merged AT&T Comcast.

Betsy Bernard, head of AT&T's consumer operations, will become the new president of the company, while the current president, David Dorman, will become chairman and chief executive officer.

Once the sale of AT&T Broadband closes, Bernard will become AT&T's president, succeeding AT&T's current president, David Dorman, who will become chairman and chief executive officer.

www.TheDeal.com

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October 16, 2002, Jiji Press, Japan, U.S. Biz Leaders to Discuss Japan's Bad Loans,

Tokyo, Oct. 16 (Jiji Press)--Japanese and U.S. business leaders are expected to discuss the disposal of bad loans by Japanese banks, an issue vital to Japan's structural reform, at a three-day meeting here from Sunday.

The 39th Japan-U.S. Business Council is also likely to raise the issue of corporate governance, following a series of high-profile accounting scandals at U.S. firms.

From Japan, 39 business leaders will attend the meeting. They will include Taizo Nishimuro, chairman of Toshiba Corp. and also cochairman of the Council, Hiroshi Okuda, chairman of the Japan Business Federation, and Nobuo Yamaguchi, chairman of the Japan Chamber of Commerce and Industry.

U.S. representatives, totaling 34, will include AT&T Corp. Chairman Michael Armstrong, cochairman of the council, and Deryck Maughan, chairman of Citigroup International.

On Monday, the participants will split into groups to discuss their respective areas, such as telecommunications, manufacturing and services. The Japanese and U.S. cochairs are set to announce a joint statement on Tuesday.

____________________________________________________________________

March 6, 2003, FT Investor (Stories) UPDATE 1- Citigroup revamps top of banking division,

Citigroup ended the power-sharing arrangement at the top of its investment banking operations, putting Robert Morse in charge of its dealmakers and making Michael Klein head of wholesale banking in Europe, the Middle East and Africa.

As is often the case at Citigroup, the reshuffle accomplishes two objectives simultaneously. Direct oversight in investment banking will be simplified, while geographic supervision in the company will become more complex.

Mr Morse, 47, will become sole head of global investment banking, reporting to Chuck Prince, head of Citigroup's global corporate and investment bank, which includes the corporate banking arm of the old Citicorp and Salomon Smith Barney.

Mr Klein, 39, is the chief executive of the global corporate and investment bank in Europe, the Middle East and Africa - a newly created region in Citigroup's "matrix" structure, which balances geographic and product oversight.

Jean-Paul Votron, 52, will head the region's consumer arm. Mr Votron has been heading corporate and consumer banking in central and eastern Europe, the Middle East, India and Africa.

It had been an open secret that relations between Mr Morse and Mr Klein could have been better - often true of co-heads in banking.

Insiders said the move would be a big test for Mr Klein, who has risen quickly in the bank and is seen as a favourite of Sandy Weill, Citigroup's chairman and chief executive.

"This is a huge challenge for Michael," one senior banker at Schroder Salomon Smith Barney said. "He has responsibility for a huge region which is geo-politically wired at the moment."

Having moved to London less than four years ago, Mr Klein was instrumental in the acquisition of Schroders, the investment bank Citigroup bought in 2000. In August 2002, Mr Klein was appointed chief executive for the investment bank in Europe and took responsibility as chairman of the European operating committee.

The management changes are the latest in a series of shifts meant to strike a better balance between geographical supervision and the management of product lines.

"Since the middle of last year, we have been saying that a big global company like Citigroup can only succeed if the countries and the products work together," said Sir Deryck Maughan, head of international operations. "The great art is to find a balance."

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May 23, 2003, Bank Marketing International, Citi, HSBC go head-to-head,

With their sprawling empires, Citigroup and HSBC are the two unchallenged godzillas of global retail banking. The strength of their brands will be tested in Brazil, where the two have chosen to fight out a consumer finance battle Significantly, the $14 billion acquisition of Household International, the US lender largely targeting the subprime market, quickly seems to be influencing HSBC's global consumer banking strategy.

For the bank is launching its own Household-style retail banking operation in Brazil aimed at low-income customers only weeks after Citigroup announced a similar plan. Its Citifinancial unit will similarly target lower-income segments.
To support its own push, Citigroup will invest more than $10 million in a re-branding campaign in Brazil this year. This will involve remodelling its 60 branches over the next two months. Rebranding "reflects the group's long-term commitment in Brazil, one of its markets with high potential outside the US," Citibank Brazil chairman Gustavo Marin was quoted as saying.

The manoeuvrings of HSBC and Citi are being watched closely by local banks, fearing that the competition will drive down high consumer loan rates in Brazil. Both banks plan to open new outlets this year and introduce new low-end products, aiming to steal business both from local banks as well as beat each other. At HSBC, the aim is to control up to 10 percent of the estimated $4 billion a year market for low- income lending.

The entry of CitiFinancial and HSBC into the low-end lending market is going to make "those that are sleeping more attentive," HSBC in Brazil's consumer finance director Celso Fernandes declared.

HSBC, which entered Brazil in 1997 with the purchase of Banco Bamerindus, is launching its initiative in Sao Paulo - Brazil's wealthiest city. Within five years, it plans to establish 120 outlets for a brand aimed specifically at poorer Brazilians. Typical customers will be those earning around the equivalent of $350 a month. Citi plans a similar initiative, involving 100 branches for local low-earners.

The ultimate prize is to bring financial services to the estimated 40 to 45 percent of Brazil's population of 80 million people who have yet to sign up to a bank account.

If successful, the two foreigners' assault on local banking does not bode well for banks like Banco Bradesco, Banco Itau and Unibanco and the other major foreign banks with local operations - SCH and ABN Amro.

While for now Citi and HSBC will be content to grow organically, ultimately they will have to turn to acquisitions to dominate local lending.

Citigroup meanwhile remains the defining benchmark for any institution with global banking ambitions. The group is stunningly diversified in geographic terms, with international business last year helping to offset a slight decline in North American profitability.

 
 
CITIGROUP 2002 NET INCOME - BY REGION ($ MN) 
 
                             2002    2001 
 
North America               8,502   8,625 
Mexico                      1,205     293 
Latin America                 (47)    665 
Western Europe                992     959 
Asia                        1,421   1,301 
Japan                       1,313   1,087 
E Europe, Mideast             785     615 
 

In 2002, 60 percent of its income came from global consumer banking, covering operations like cards and consumer finance - relegating global investment banking to 22 percent of the total.

By region, North America contributed a 63 percent of income last year. Asia then contributed the next large proportion, at 10 percent, followed by Japan at 8 percent. Mexico was responsible for a further 9 percent, helped by the acquisition of Banamex in 2001, followed by Western Europe 7 percent and then central and rapidly-grown Citi operations in eastern Europe, at 6 percent, its annual report shows.

Deryck Maughan, Citigroup vice-chairman, has just hinted at future acquisition priorities. The group wants to focus on nine key markets for growth - Hong Kong, Singapore, India, Germany, UK, Poland, Japan, Taiwan and Brazil. He declared, "The more products, the more countries, the more secure we feel."

Copyright: Lafferty Limited. All rights reserved.

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June 19, 2003, The Asian Banker Journal, Citigroup names head of GCIB in EMEA,

Citigroup (NYSE: C) today announced that it has created a new business region consisting of Europe, the Middle East, and Africa (EMEA), and accordingly has appointed Chief Executive Officers to run its Corporate and Consumer businesses in the region.

Citigroup named Michael Klein Chief Executive Officer of the company's global corporate and investment bank in EMEA, and named Jean-Paul Votron Chief Executive Officer of Citigroup's Consumer Group in EMEA, which consists of some 54 countries, including those in Central and Eastern Europe. In line with Citigroup's international matrix structure, GCIB businesses in EMEA will have dual reporting responsibility to Mr. Klein and the respective global business heads. Consumer businesses in EMEA will have dual reporting responsibility to Mr. Votron and the respective global business heads.

"This new management structure sharpens our focus on our core businesses and reflects our decision last year to run our businesses along global product lines in each of the major geographic regions where we operate," said Sanford I. Weill, Chairman and Chief Executive Officer of Citigroup. "Under this structure, we can better identify our market opportunities and run our businesses more efficiently. Both Jean-Paul and Michael have contributed enormously to Citigroup's achievements in this region, and I am pleased that they will be leading two of our most important businesses in markets that are key to our ability to grow.

"We asked two of our best managers with excellent track records to take on what is one of our most important regions. Michael's success in co-heading the investment bank and heading the GCIB in Western Europe these past several years and Jean-Paul's success running Central and Eastern Europe, the Middle East and Africa have prepared each of them for this next and greater challenge extraordinarily well," Mr. Weill said. "I have no doubt that they will build on their successes as they bring their unparalleled experience and talent to the entire region."

Mr. Klein was formerly CEO of the GCIB in Europe and global co-head of the Investment Bank. He will report jointly to Charles Prince, Chairman and CEO of the GCIB, and Deryck Maughan, Chairman and CEO of Citigroup International. Shirish Apte, CEO of the GCIB in CEEMEA, will report to Mr. Klein. Citigroup's Corporate products in EMEA include corporate and investment banking, capital markets, and transaction services.

Mr. Votron was formerly CEO of Citigroup's businesses in CEEMEA. He will report jointly to Mr. Maughan and Robert Willumstad, President of Citigroup and Chairman and CEO of the company's Global Consumer Group.

Mr. Votron began his career in 1975 at Unilever as a Product Manager. During his time there he held various positions in International Sales, Marketing and General Management. From 1991 to 1997, he worked in various senior consumer positions at Citibank in Europe and in the U.S. He then joined ABN AMRO Bank as Senior Executive Vice President, Director General for International Consumer Banking and e-Commerce. Mr. Votron rejoined Citigroup in January 2001 as CEO of the Consumer Group for CEEMEA.

Under Mr. Votron's leadership, Citigroup's net income for CEEMEA grew nearly 28% from 2001 to 2002, with income from Consumer businesses more than doubling year on year. His appointment will provide for full alignment with Citigroup's global strategy for growing its retail banking, consumer finance and cards businesses.

Mr. Klein joined Salomon Brothers Mergers & Acquisitions group in 1985 and founded the firm's practice advising leveraged buyout and private equity firms in 1988, and will continue to focus on private equity in his new role. He was promoted to Managing Director in 1993 and has served as global co-head of the Investment Bank since 1999. He was a critical contributor to the firm's successful acquisition and integration of Schroders' Merchant Banking business in 2000. In addition to his role as global co-head of the Investment Bank, Mr. Klein became CEO of the GCIB for Western Europe in 2002.

Over the past four years, Citigroup has reached a clear leadership position in investment banking. In 2002, Citigroup's Investment Bank ranked number one in disclosed fees and completed more transactions globally than any other firm. Citigroup also significantly increased its market share, ranking in the top two in most M&A, equity and fixed income categories.

___________________________________________________________________________

July 17, 2003, The Daily Deal, Citi's Weill hands crown to Prince, by Heidi Moore, 

Sandy Weill, one of the more storied figures in finance, announced he will step down as CEO of Citigroup Inc. in January and had three words of advice to his successors: "Don't screw up."

Charles O. Prince, 53, the chairman and CEO of Citigroup Global Markets, will become the next CEO of Citigroup. Robert Willumstad, 57, currently the president of Citigroup, will become chief operating officer. Todd Thomson will remain CFO. Debby Hopkins, former CFO of Lucent Technologies and Boeing Co. and currently Citi's head of strategy and corporate services, will now oversee mergers and acquisitions as well.

Michael Masin, the COO of Citi for the past nine months, will leave his post after the transition and remain a consultant to the company.

Weill, 70, will remain Citi's chairman until 2006.

Gary Parr, deputy chairman of Lazard, former head of financial institutions investment banking at Morgan Stanley and a banker who did his first deal for Sandy Weill in 1983, said Weill would inevitably continue to be a force at Citigroup. "Sandy has had one of the most illustrious careers in financial services, and I don't think it's coming to a close," Parr said. "Instead, the next chapter is going to be written."

Prince, previously chief operating officer of Citi, began his career as a lawyer at U.S. Steel in 1975, then joined Citigroup predecessor Commercial Credit Corp. in 1979. When Weill took over in 1986, Prince joined his team.

Prince was a surprising choice as direct successor to many on Wall Street. "Chuck has served in legal and administrative roles, and was COO. He did not have line responsibility until last summer," said Brock Vandervliet, a financial services analyst for Lehman Brothers Inc. "He was seen as a contender for the role a little sooner than I would have expected. It's relatively fast and a huge move."

"It does show that for Sandy, loyalty is No. 1," said a veteran banker who has worked with both Prince and Weill.

Willumstad will oversee the consumer business, the Smith Barney research business led by Sallie Krawcheck, the investment management business led by Thomas Jones, Citigroup International, led by Sir Deryck Maughan, and Citigroup Global Investments, run by Michael Carpenter.

Willumstad is also a Commercial Credit veteran. He joined the lender in 1987 after two decades at Chemical Bank.

Willumstad has been president of Citi since January 2002, and has overseen the consumer businesses since December 2000.

Prince will continue to run the investment bank, and Willumstad will still oversee the consumer business.
Prince pledged in a conference call that he would hew to the same course Weill has set for Citi.
Prince, little known outside Citi, noted that he would not be a showman like Weill. "I think my outside persona is not as important as how we perform and how the company grows," he said.

"The public face of the company is definitely going to change quite a bit," noted Lehman's Vandervliet. "Sandy was nothing if not perpetually out in front."

Hints of potential succession came when Weill tapped Prince to run the global investment bank last summer. At the time, the unit was defending its links with Enron, WorldCom and research analyst Jack Grubman. Citi's stock was trading at around $35.24, just a few weeks into a rebound from its 52-week low of $24.75 on July 24. Prince was widely viewed as Weill's choice to clean up mounting regulatory and legal concerns.

More recently, with the analyst settlement resolved, a flurry of organizational changes may have foreshadowed Weill's move. The spinoff of Smith Barney as a separate research division, headed by Krawcheck, occurred in November 2002. Citi dropped the Salomon Smith Barney name for its investment bank in April in favor of Citigroup Global Markets. And in May, Citi named new general counsel Michael Helfer from Nationwide Financial Services Inc.

The announcement ends long speculation over a successor for Weill, who created Citi through a series of acquisitions beginning with Commercial Credit Corp., which he took over in 1986.

In a statement issued by Citi, Weill said he started thinking about succession more than three years ago. He added in a conference call that he worked hard to avoid the bitter succession battles often seen on Wall Street.

He said he decided to make the move now because "I think the company has the wind at its back," mentioning Citi's strong earnings announced Monday, a 75% increase in the dividend and Tuesday's announcement that Citi would pay $3 billion to buy the credit card portfolio of Sears.

Analysts were skeptical about whether Weill's personality would allow him to sit back and let the new leaders manage on their own. Weill made light of the expectation, when Prince said that Citi would be different without "having [Weill] here to nag us and push us and demand excellence every morning," to which Weill replied, "Why do you think I won't do that?"

Citi's stock price dropped 2.8% Wednesday to close at $45.52.
COMPANY: Citigroup Inc. (C)

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February 23, 2004, Agence France Presse, Citibank acquires SKorea's Koram Bank, 

Citibank has signed an agreement for the acquisition of South Korea's sixth largest lender, Koram Bank, the two companies said in a statement.

The deal includes the US firm's acquisition of a 36.6 percent stake in Koram held by the Carlyle Group of the United States and a tender offer for up to 100 percent of outstanding shares valued at 3.18 trillion won (2.73 billion dollars), the statement said.

The deal, subject to regulatory approval, has been approved by the boards of directors of both Koram and Citibank and is expected to be concluded by June, it added.

Under the deal, Citibank will become the first foreign bank to acquire a South Korean bank.

US private equity funds have already taken control of South Korean banks, with Lone Star acquiring Korea Exchange Bank, Newbridge Capital taking over Korea First Bank and Carlyle purchasing a controlling stake in Koram.

Koram, the sixth largest South Korean lender, operates 222 domestic branches and has total assets of 43 trillion won, the statement said. Following the acquisition, the combined group will be the fifth largest financial business in the country based on revenue.

"The combination of Koram and Citigroup will create a leading local bank with global capabilities," Citigroup International CEO Deryck Maughan said in the statement.

As a condition of the sale, Citigroup said it was targetting at least an 80 percent overall stake, meaning it must succeed in acquiring a further 43.4 percent stake after the purchase of the Carlyle holding.

The tender offer price represents a 6.7 percent premium over the average closing price of Koram stock on the Korean Stock Exchange over the last 30 trading days of 14,530 won, and a 17.2 percent premium over the average closing price for the past six months of 13,228 won, the statement said.

Koram's board intends to recommend that shareholders tender their shares to Citigroup.

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February 23, 2004, Asia Pulse, Citigroup to Buy Out Koram Bank for US$2.73 Bln,

SEOUL, Feb 23 Asia Pulse - Citigroup, the No. 1 financial services group in the United States, announced Monday it may buy up to 100 per cent of KorAm Bank (KSE:016830), South Korea's seventh-largest lender by assets, with a proposed amount of US$2.73 billion.

The U.S. finance giant said at a press conference at Shilla Hotel in Seoul that it already made a contract with private equity groups JP Morgan and Carlyle Group to acquire their jointly held 36.6 per cent stake in KorAm Bank to make it the largest shareholder in the bank.

Citigroup said it would also buy up other interests in the bank at a per-stock price of 15,500 won through takeover bids. It aims to do so within the second quarter of this year.

Citigroup and KorAm approved the acquisition contract in their respective board meetings Monday. KorAm's board, furthermore, recommended existing shareholders sale their stakes to Citigroup.

Citigroup plans to secure at least 43.4 per cent of the Korean lender through the tender offer, which could advance their total holding to 80 per cent, including the 36.6 per cent stake from JP Morgan and Carlyle.

If all goes according to plan, Citigroup would become the largest foreign investor in South Korea.

It is the first time for a foreign bank to buy out a domestic bank. Previously, overseas private equity funds such as Lone Star, Newbridge Capital and Carlyle have been the buyers of banks in South Korea.

KorAm's nationwide 225-branch network was considered attractive to foreign banks seeking to penetrate the country's retail banking market, industry analysts said.

The merger of KorAm with Citigroup's Citibank operations in South Korea, including $8.9 billion in assets and 12 branches, would move KorAm up a notch from the nation's seventh-biggest lender to sixth largest.

Deryck Maughan, Chief Executive Officer of Citigroup International, said that South Korea is an attractive emerging market, where his financial group places strategic priority.

(Yonhap)

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February 29, 2004, The Asian Banker Journal, Korea: Citigroup to acquire KorAm Bank for $2.73 billion,

Citigroup (NYSE: C) and KorAm Bank (KSE: 016830.KS) today announced that they, together with an investor consortium led by The Carlyle Group and JP Morgan Corsair II, have signed an agreement for the acquisition of KorAm by Citigroup. The terms of the transaction include the acquisition of the consortium's 36.6% stake in KorAm and a tender offer for up to 100% of the remaining shares at a price of KRW 15,500 per share in cash, or a total of KRW 3.18 trillion ($2.73 billion). 

The price per share represents a 6.7% premium over the average closing price of KorAm stock on the Korean Stock Exchange for the last 30 trading days of KRW 14,530 and a 17.2% premium over the average closing price for the past six months of KRW 13,228. 

The Board of Directors of Citigroup and KorAm have approved the transaction and the Board of KorAm intends to recommend that shareholders tender their shares to Citigroup. The tender offer will commence as soon as all required regulatory approvals are received, and the transaction is expected to close in the second quarter of 2004. 

KorAm is the sixth largest commercial bank in Korea, with 222 domestic branches and total assets of KRW 43.0 trillion ($36.8 billion). The businesses of Citigroup and KorAm, taken together, will create the fifth largest financial business in Korea, based on revenues. Citigroup expects that the transaction would be accretive to its 2004 earnings. The transaction, including the making of the tender offer, is subject to customary conditions, including receipt of all required regulatory approvals, and the successful tender of at least 43.4% of KorAm's shares so that together with the 36.6% to be acquired from the consortium, Citigroup will own at least 80% of KorAm's outstanding shares. 

"Korea is a strategic priority for Citigroup," said Sir Deryck Maughan, Chairman and Chief Executive Officer, Citigroup International. "The combination of KorAm and Citigroup will create a leading local bank with global capabilities. Together, we will be able to better serve our clients and contribute to Korea's growth and development. Having established ourselves in Korea in 1967, we are deeply committed to the country, which is one of the fastest growing economies in the world, with a gross domestic product of more than $500 billion and a projected GDP growth rate of more than 6% in 2004. We see this transaction as part of a broader strategy to provide greater access to Citigroup's world-class products and services in attractive and growing markets, while providing new opportunities for employees and superior performance for our shareholders." 

"Through this transaction, we are providing shareholders attractive value for their investment, customers convenient access to a full array of world class products and services, and employees exciting new opportunities for career development," said Yung-Ku Ha, Chairman and Chief Executive Officer of KorAm. "Citigroup is an ideal partner, one which is best positioned to maximize synergy between our two companies. It is the world's premier global financial institution and a strategic investor that has an in-depth understanding of Korea. We look forward to the successful completion of this transaction and to working together with Citigroup to create what I know will be the country's finest financial institution." 

Michael ByungJu Kim, President of Carlyle Asia, said, "The KorAm management team and employees have built a world-class financial institution, creating exceptional value for its customers and shareholders. We at Carlyle, JPMorgan Corsair and the consortium are proud to have made a contribution to the development of KorAm and the banking sector in Korea." "Citigroup's decision to acquire KorAm is a significant vote of confidence in the Korean economy," said D.T. Ignacio Jayanti, President of Corsair. "This transaction represents a strong validation of the Carlyle-Corsair consortium's investment thesis, and speaks to the potential for private equity to play a constructive role in the restructuring of banking systems globally." Re-disseminated by The Asian Banker

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February 29, 2004, The Asian Banker Journal, Citigroup restructures its corporate and investment banking group,

Citigroup (NYSE: C) today announced that it has created two new main business groups - the Capital Markets Group and the Banking Group - within its Global Corporate and Investment Banking Group (GCIB), an important organizational step that institutionalizes an ongoing effort to pair with precision the GCIB's broad capabilities with client needs. Capital Markets Tom Maheras will become Head of Capital Markets, which will consist of all of the GCIB's sales and trading and capital markets businesses. He will continue to report to Robert Druskin, President and Chief Executive Officer of the GCIB. Reporting to Mr. Maheras: James Forese, Head of Equities; two newly named Co-Heads of Fixed Income: Geoff Coley and Randy Barker; and Ward Marsh, Head of Municipal Securities. The origination units of Equity Capital Markets and Debt Capital Markets will continue to operate as a joint venture with Banking, outlined below. Banking Michael Klein will become Head of Banking, reporting directly to Mr. Druskin. In this new role, Mr. Klein will oversee all of our client-facing banking groups and coordinate our corporate client coverage across the organization. The Banking Group will consist of Citigroup's Global Relationship Bank, headed by Alan MacDonald; Emerging Markets Corporate Banking, headed by Suneel Bakhshi; and a new Head of the Investment Bank to be named shortly. Each of these business heads will report to Mr. Klein. Frank Bisignano will continue to head Global Transaction Services, reporting to Mr. Druskin, and will coordinate client coverage closely with Banking. Citigroup International Robert Morse, currently Head of the Investment Bank, will return to Asia, the fastest growing region in the world, to become Head of the GCIB in Asia Pacific, succeeding Stephen Long. Mr. Morse will report jointly to Mr. Druskin and Deryck Maughan, Citigroup Vice Chairman and Chief Executive Officer of Citigroup International. Bill Mills has been named Head of GCIB in Europe, Middle East, and Africa, succeeding Mr. Klein. Mr. Mills will report jointly to Mr. Druskin and Mr. Maughan. Mr. Long has been named Chief Operating Officer of Citigroup International, reporting to Mr. Maughan. He will assist in the development of our international business and be responsible for the day-to-day operations of the group.

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March 31, 2004, The Asian Banker Journal, Citigroup names chairman and CEO of Latin America and Mexico,

Citigroup (NYSE: C) today named Manuel Medina- Mora Chairman and Chief Executive Officer of Citigroup Latin America and Mexico. Mr. Medina-Mora, who will report to Sir Deryck Maughan, Chairman and Chief Executive Officer of Citigroup International, also retains the position of Chief Executive Officer of Banamex that he has held since 2001. In making this announcement, Robert B. Willumstad, Chief Operating Officer of Citigroup, said, "Manuel is an exceptional business executive who has guided Grupo Financiero Banamex to become the number one corporate bank, the number one retail bank, the number one credit card issuer, and the number one pension fund manager in Mexico. Manuel's leadership of our Latin America and Mexico operations as part of Citigroup International will enable us to achieve a more comprehensive and better-integrated international strategic approach for Citigroup." 

Mr. Willumstad also announced a new senior team for the Latin America region. Guillermo Acedo has been named Head of the Global Consumer Group - Latin America, reporting to Mr. Medina-Mora and Marge Magner, Chairman and Chief Executive Officer, Global Consumer Group. Gustavo Marin has been named Head of the Global Corporate and Investment Banking Group - Latin America, reporting to Mr. Medina-Mora and Robert Druskin, President and Chief Executive Officer, Global Corporate and Investment Banking Group. John Gerspach has been named Chief Administrative Officer of the Latin America region, reporting to Mr. Medina-Mora. Jorge Bermudez, outgoing Chief Executive Officer of Citigroup Latin America, has become Senior International Advisor of Citigroup. 

Mr. Medina-Mora said, "Citigroup has an outstanding management team with enormous experience and deep knowledge of the markets and customers in the 23 countries in Latin America and the Caribbean where we do business. I look forward to working with the new senior management team, which is structured to build on our progress in aligning our efforts with our customers' needs and providing them with the finest financial products and services in the region. I am honored to have the opportunity to work with the regional and country teams -- and all of our colleagues throughout Citigroup International -- as we continue to focus on customer commitment and accelerating growth." 

In his capacity as Chief Executive Officer of Banamex, Mr. Medina-Mora will continue to lead the management team of Banamex, overseeing all of Banamex's businesses and operations, including the Corporate and Investment Bank, Consumer Bank, the Cards Business, Retail Banking, Treasury, Insurance, Pension Funds, Securities, Brokerage, and Asset Management. 

Mr. Medina-Mora joined Banamex in 1971, and during his first years held several positions in the International and Corporate Banking Groups. From 1981 to 1987, he was responsible for the Bank's operations in London and New York. In 1990, he led Banamex's privatization, and as a result of the creation of Grupo Financiero Banamex-Accival in 1991, he became Deputy President, responsible for the bank's strategy and corporate development. In 1996, he was appointed Chief Executive Officer of Grupo Financiero Banamex-Accival, a position that he held until mid-2001. 

After the integration of Banamex into Citigroup in 2001, Mr. Medina-Mora was appointed Chief Executive Officer of Banamex and became a member of Citigroup's Management Committee in January 2002. Re-disseminated by The Asian Banker

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May 26, 2004, FT Investor (Pulses) GSK unveils Sir Christopher Gent as new chairman,

Pharmaceuticals giant GlaxoSmithKline on Wednesday said former Vodafone chief executive Sir Christopher Gent would be succeeding Sir Christopher Hogg as its chairman from the beginning of next year. Sir Christopher Gent, who presided over Vodafone's record-breaking $218bn hostile bid for German rival Mannesman in 2000, will join the company as deputy director in June ahead of taking up the position of non-executive chairman on January 1. Sir Christopher Hogg will retire from the GlaxoSmithKline board on December 31. Joining the GSK board along with Sir Christopher Gent in June will be Sir Deryck Maughan, the chairman and chief executive of Citigroup International. Commenting on the appointments, Sir Christopher Hogg said: "I am delighted that Chris and Deryck are joining the board. Sir Christopher brings with him many years of experience and a track record of delivering outstanding performance in a highly competitive global industry which will be invaluable to GSK. Sir Deryck brings with him a wealth of international corporate and investment banking experience, which will be of great value to the board." In afternoon trading, shares in GlaxoSmithKline were 0.2 per cent higher at 1159p.

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May 31, 2004, The Asian Banker Journal, Jap: Citigroup named chief executive officer,

 

Citigroup (NYSE: C) named Douglas L. Peterson, 45, Chief Executive Officer of Citigroup Japan and the Chairman and Chief Executive Officer of Citibank Japan. Peterson, who has served as Citigroup's Chief Auditor since October 2000, will continue as a member of the Citigroup Management Committee and will become part of the Citigroup International Planning Group. 

"Doug's leadership of our Japanese business will facilitate a coordinated strategy of growth and customer commitment in one of the world's largest markets," said Sir Deryck Maughan, Chairman and Chief Executive Officer of Citigroup International. "Citigroup has had operations in Japan for more than a hundred years and today is the leading foreign financial institution in Japan. Doug will build on that heritage and invest further in our capacity to serve Japanese consumers and corporations." 

Before becoming Citigroup's Chief Auditor, Doug served for two years as a Managing Director of Audit and Risk Review. In that role, he oversaw the merger of the audit functions of Citigroup's predecessor companies and then managed audit teams covering the Global Capital Markets, Latin America, and Travelers insurance businesses. During his tenure at Audit and Risk Review, the function earned recognition for the quality of its work and the forward-looking nature of its approach. 

Peterson joined Citibank in 1985, working as a Relationship Manager with the Corporate Bank, first in Buenos Aires and then in New York, covering domestic and international airlines and aircraft manufacturers. In 1991, he became the Country Corporate Officer of Costa Rica, where he expanded the franchise by opening the first foreign-owned bank in the country. 

In 1995, he was named Country Corporate Officer for Uruguay, where he managed the corporate bank and oversaw Citicorp's mutual fund. Peterson also launched a private pension fund through a joint venture. 

He graduated from Claremont McKenna College in 1980 with a B.A. in Mathematics and History and received an M.B.A. from the Wharton School of the University of Pennsylvania in 1985, where he concentrated in International Finance. He serves on the board of Teaching Matters, Inc. and the advisory boards of the Wharton Financial Institutions Center and the National Council of La Raza. Re-disseminated by The Asian Banker

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June 21, 2004, Jiji Press, (Update) Citigroup to Cut Stake in Nikko Cordial to 12 Pct.,

Tokyo, June 21 (Jiji Press)--Japanese securities holding company Nikko Cordial Corp. said Monday its largest shareholder, Citigroup Inc. of the United States, will reduce its equity stake in Nikko Cordial to approximately 12 pct from the current 20.8 pct.

Citigroup International Chairman Deryck Maughan told a press conference that Citigroup no longer needs to hold such a large amount of shares in Nikko Cordial, whose financial strength has improved.

Maughan, however, added that Citigroup will remain Nikko Cordial's top shareholder even after the share sale, and that it will maintain its current business ties with Nikko Cordial.

Citigroup is seen to be planning to invest some 100 billion yen from the sale of Nikko Cordial shares to acquire other firms.

Maughan, however, declined to comment on speculations that Citigroup is considering purchasing the credit card business of consumer finance firm Aplus Co., affiliated with UFJ Bank, using the proceeds from the share sale.

Meanwhile, Nikko Cordial President Junichi Arimura said the company will release the 180 million shares to be sold by Citigroup on the market with the aim of increasing the number of individual shareholders.

Nikko Cordial hopes to increase the ratio of individual shareholders to around 30 pct from the current 16 pct, Arimura said.

But the company is considering buying back up to 90 million of the 180 million shares to prevent deterioration in the supply-demand balance of its shares on the market, he said.

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June 22, 2004, Asia Pulse, Japan's Nikko Cordial, Citigroup to Keep Seeking Joint Projects,

TOKYO, June 22 Asia Pulse - Even after Citigroup Inc. reduces its stake in Nikko Cordial Corp. (TSE:8603) to about 12 per cent from roughly 21 per cent, the two groups will see no change in their alliance and keep exploring further collaborative projects, Nikko Cordial President Junichi Arimura and Citigroup International Chairman Deryck Maughan said at a joint news conference Monday.

The reduction will benefit rather than hurt Nikko Cordial by giving it greater control of its management, Arimura said.

At the same time, the U.S. and Japanese groups plan to maintain their business partnership and will continue studying potential joint ventures and other projects, he added.

Citigroup will still retain a stake of around 12 per cent, enabling it to remain a major shareholder in Nikko Cordial at 10 per cent even if the Japanese firm decides to increase its capital through a new share offering later, according to Arimura.

As the top shareholder, Citigroup will continue to have its presence at board of directors meetings at Nikko Cordial, Maughan noted.

Nikko Cordial plans to acquire 90 million of the roughly 180 million shares Citibank is expected to sell, while the rest will be sold mainly to individual investors, Arimura said. The Japanese company wants to see the combined ownership of individual investors increased from the current 16 per cent or so to more than 20 per cent by the end of March 2005 and in excess of 30 per cent in the medium to long term, he added.
(Nikkei)

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October 21, 2004, The Daily Deal, Movers & shakers: Oct. 21, 2004, by Baz Hiralal, 

Citigroup Inc. said three of its highest-ranking executives, including Citigroup International chairman Sir Deryck Maughan, are leaving the bank. The group also includes Thomas Jones, the CEO of Citigroup Asset Management, and Peter Scaturro, CEO of Citigroup Private Bank.

Citigroup's board made the decision to ask for the trio's resignations at a meeting on Oct. 19, according to a source familiar with the situation. The departures are effective immediately. Several sources indicated that the exits are directly related to Citigroup's closure of its private banking operation in Japan in late September, demanded by the Japanese Financial Services Authority because it found "fundamental problems with Citibank Japan's compliance and governance systems," Citibank said in a press release at the time. The bank is investigating the unit.

Sources said relationships among Maughan, Jones and Scaturro were characterized by squabbles over the right to claim revenue for their specific units. The infighting intensified as bonus season drew near, and Citi's board grew exasperated, a source said.

Citigroup chief operating officer Bob Willumstad will take over Citigroup Asset Management, Citigroup Private Bank and the Travelers Life & Annuity business, the bank said. Todd Thomson, who recently became the chairman of Smith Barney, will take over the Private Bank starting on Nov. 5.

Citigroup has made a number of major changes at the top lately. In October, it named Sallie Krawcheck, the former chief executive of the Smith Barney unit, as Citigroup's chief financial officer. This week, top investment banker Eduardo Mestre resigned from the bank to join mergers boutique Evercore Partners Inc. Mestre's departure was unrelated to those of Maughan, Jones and Scaturro. -- Heidi Moore

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October 21, 2004, Investor's Business Daily, Japan flap pushes out Citi execs, 

Three top Citigroup execs will exit the No. 1 U.S. bank due to Japan's recent decision to close Citigroup's private banking ops there for various violations. Sir Deryck Maughan, a vice chairman; Thomas Jones, head of the global investment management division; and Peter Scaturro, head of Citi's private bank, will leave. Citi shares fell 0.5% to 43.29.

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October 25, 2004, The Daily Deal, Small is beautiful, by Heidi Moore,

For a number of years, it was a pretty safe bet that Eduardo Mestre's banking career would end where it began: at Citigroup Global Markets Inc. After all, Mestre, 55, joined Salomon Brothers in 1977 and rose through its and its successors' ranks for 27 years. But on Oct. 18 Mestre, the consummate big-bank banker, said he would move to Evercore Partners Inc., the advisory boutique run by former deputy treasury secretary Roger Altman.

The announcement wasn't a total surprise. In July, Mestre said he would give up his post as chairman of investment banking in September to take on the amorphous role of advisory director, working with clients "on a selective basis" and looking around Wall Street for his next job. Altman soon came calling. The two men didn't know each other well, but Mestre had often worked on deals opposite Evercore telecom maven Michael Price, including Pacific Telesis Group's merger with SBC Communications Inc.

Evercore had much to recommend it to Mestre, including a string of high-profile assignments this year, such as advising Cingular Wireless LLC in its acquisition of AT&T Wireless Services Inc. and working on the PanAmSat Corp. satellite auction. The firm's small size -- it has only 25 advisory pros -- and advisory-only model was also a draw for Mestre, who at Citi often courted the same clients, most notably WorldCom Inc., as the notoriously conflicted Jack Grubman. As an Evercore vice chairman, Mestre will run the firm's M&A advisory practice, which is currently overseen by Altman. Some say he's also successor material to head or co-head Evercore, which could come in handy if John Kerry wins the election and taps Altman for a treasury post.

The Cuban-born Mestre's first job at Salomon, which he joined after four years as an associate at Cleary, Gottlieb, Steen & Hamilton, was in Latin America, where he drummed up business in Argentina, Brazil, Mexico and Venezuela. In 1981 he moved to New York, and in 1982 he was tapped to work on the breakup of Ma Bell. Two years later, he founded Solly's first telecom banking industry group, and by 1989 he was co-heading M&A. In 1995 he became head of investment banking and six years later the group's chairman. But he never stopped doing deals, and in recent years, helped American Online Inc. merge with Time Warner Inc. and WorldCom with MCI Inc.

Mestre starts at Evercore on Nov. 1. His departure from Citi last week was a bit overshadowed by news that international chairman Sir Deryck Maughan would retire, as would the CEO of Citigroup Private Bank, Peter Scaturro and the CEO of Citigroup Asset Management, Thomas Jones, as they take the fall for Citi having to close its Japanese private bank. That's a lot of goodbyes.

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October 30, 2004, The Spectator, The Great Presidential Stakes turns into a trillion-dollar handicap,
by Christopher Fildes,

The man who got it right, in his way, was Al Gore. Quoting Al Jolson, he promised the voters: 'You ain't seen nothin' yet.' This was his message four years ago, when I was in New York, leaning over the rails to watch the two runners in the Great Presidential Stakes as they neared the line--then, as now, neck and neck. In those distant days, money was rolling in to the Treasury, and the candidates were competing to spend it. 

George Bush I had raised taxes and lost an election, so George Bush II was in favour of cutting them. Al Gore said that the age of prosperity was only just starting. I thought that was asking too much. The economy, I said, had taken us all for a long and enjoyable ride on the cycle, but now it was wobbling, and as cycles went it looked more like a cart-propelled horse, pushed forward by the stock market, which peaked a month later. 

As for the embarrassment of the Treasury's riches--the national debt, we were seriously told, was on course for extinction--that never looked like a problem beyond the wit of modern governments. Awarded the race by a controversial decision in the stewards' room, Mr Bush has never since met a spending plan he disliked enough to veto it, and he has proved himself a tax-cutter for all seasons. In good times, so he thinks, cuts are affordable, and in bad times, cuts are the remedy. This has enabled him to preside with indifference over the decline of his country's finances, and although, as Adam Smith said, there is a deal of ruin in a nation, reversing the process requires an effort of will. That will be the task for this year's winner of the Great Presidential Stakes. We ain't seen nothin' yet.

Nunn of the above

The economic handicappers at Goldman Sachs have been working the form out. Four summers ago, they say, the US federal government was completing its fourth consecutive year in the black, with a surplus of $236 billion, and the Congressional Budget Office was projecting a surplus of $5.6 trillion over the ten years ahead. It is now projecting a ten-year deficit of $2.3 trillion, even assuming that the Bush tax cuts expire when their time runs out. Doubting this, Goldman's economists think that $5 or $6 trillion now looks more likely, getting worse as the decade goes on. Both candidates have plans for halving the deficit, but the economists cannot make either set of numbers add up. They believe that John Kerry takes the point more seriously, with George Bush II more concerned about getting his tax cuts entrenched. I can see why William Janeway, investment banker and occasional Spectator columnist, always backed Senator Sam Nunn of Georgia. He yearned to vote for Nunn Of The Above.

Gold votes early

You can see how gold is voting. Pushing up this week to its highest price--in dollars, that is--for 16 years, it is firmly in the Nunn (or Neither) camp. This administration has had to print trillions of dollars, the next one will have to print more, printing dollars is easier than mining for gold, and the price is reflecting the difference. This process used to be known as inflation, and when Alan Greenspan retires from the Federal Reserve next year, his successor will need to do something about it, even if that hurts. Until now the markets have found the sage's presence reassuring, but he may be nearing his wise-by date. Observe that oil is now voting the same way as gold.

Reputation undone

Poor old Citicorp can't put a foot right. Correction: rich old Citicorp. This week's fine--$250,000 for misleading investors in hedge funds--will not break the world's biggest provider of financial services, but it represents a bad habit. When the markets were blazing, Citi wandered too close to the flames, burning its fingers on WorldCom and Enron, losing billions and getting some expensive reputations dented. Undeterred, Citi raided Europe's bond markets and suffered more reputational damage. In Japan, Citi's private bankers provoked the hosts into withdrawing their licence. This in turn provoked Charles Prince, Citi's new chief executive, to order a purge whose victims included the head of Citigroup International, Sir Deryck Maughan. This rising star of Her Majesty's Treasury was lured away to Salomon Brothers, and Warren Buffett called on him to run it, greeting him as the lift doors opened and saying, 'You're tapped.' That was an earlier exercise in repairing reputations after serious damage. Then Citi paid a fortune for Salomon, and a new generation got up to new tricks, and now the name has been junked and the work must be done again. Markets, as Sir Patrick Sergeant says, are ruled by greed and fear--and greed's turn, for the moment, is over.

Sheriff Spitzer

The big winner from fear's turn is Eliot Spitzer. He rides into Wall Street with his silver star pinned to his chest, and the men in black hats flee, or fall from their horses. As New York's Attorney General, he has taken on its financial grandees, and Jeffrey Greenberg is only the latest. He was chairman and chief executive of Marsh & McLennan, insurance brokers to the world, until Mr Spitzer swooped, accusing Marsh Mac of a culture of covert commissions, knocking two fifths off its share price and inviting Mr Greenberg's resignation. In the same way as Mr Spitzer and in the same job, Rudolf Giuliani made his name as a financial crime-buster, went on to be mayor of New York and may still have higher aspirations. So, surely, has Mr Spitzer. Watch his speed when next the elections come round.

Off tracks

Amtrak has me worried. This is the hard-pressed operator of America's long-distance passenger trains, and now it has moved into the British market and diversified into delivering wines. Either that, or someone on this side has borrowed its name and dressed it up with a suitable logo. I find that what this Amtrak does best is delivering cards which explain why it has taken the wine somewhere else--back to its depot, or back to the wine merchant, or away to the surgery of a neighbouring doctor, who is surprised to learn that this is what he ordered. If this is the railways' Amtrak, too, I wonder where it leaves its passengers.
No Results

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October 31, 2004, The Asian Banker Journal, Financial Institution,

"This is a business in which size counts." Peter Williams, managing director, Equity Trustees reportedly commenting on the company's plan to merge its trustee operations with ANZ Bank to form Australia's third-largest trustee company. 

Aus: Axa SA withdraws bid for Axa 

Asia Pacific French insurance company AXA SA has withdrawn its A$3 billion ($2.19 billion) takeover bid for Axa Asia Pacific Holdings after the directors rejected an offer of A$4.05 ($2.95) a share. A group of local investors was understood to be pushing for nearly A$4.50 ($3.28). Axa SA announced in August that it was looking to buy 48.3 percent stake in Axa Asia Pacific. 

India: UTI's net profit dips UTI BANK's net profit fell by 28 percent to Rs 46.22 crore ($10.09 million) in the third quarter compared to Rs 64.18 crore ($14.02 million) a year ago. The decline is attributed mainly to trading losses in 2004. This is a one-time hit that the bank incurred on account of transfer of gilts from 'available for sale' to 'hold to maturity' category. 

Indo: Bank Mandiri seeks bilateral loans 

BANK MANDIRI plans to seek bilateral loans from foreign banks to help refinance its maturing debts totaling between $300 million to $400 million in year 2004. This is following a decision to drop plans to raise the required funds from overseas bond markets. The bank will probably seek debt refinancing facilities from foreign banks such as HSBC. Int'l: 

Citigroup ousts three top executives 

Charles Prince, chief executive of CITIGROUP, removed three of its most senior executives in his efforts to restore the company's reputation by for failing to prevent regulatory problems in Japan. Sir Deryck Maughan, chairman of Citigroup International, Thomas Jones, head of investment management, and Peter Scaturro, head of its private bank, will all be leaving the company. 

Korea: Merger of three exchanges planned 

The planned merger of the KOREA STOCK EXCHANGE, the KOSDAQ STOCK MARKET and the KOREA FUTURES EXCHANGE has been set for December 2004. The merger will upgrade competitiveness of the nations' trading system for a variety of financial products, including stocks, options and other derivatives products. Copyright (c) The Asian Banker

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November 13, 2004, Jiji Press, Japan, U.S. Biz Leaders to Discuss Chinese Economy,

Tokyo, Nov. 13 (Jiji Press)--Japanese and U.S. business leaders will discuss Chinese economic issues as one of main topics in the 41st Japan-U.S. Business Conference to be held in Tokyo for two days from Sunday.

China, which has achieved remarkable economic development recently, will be included in the agenda of the annual meeting for the first time ever.

Toshiba Corp. Chairman Taizo Nishimuro, a cochair of the meeting, said the conference will consider making recommendations for the Chinese government to implement appropriate economic policies.

Regarding China, participants in the conference will discuss the nation's economic trends and the problems of intellectual property rights and foreign direct investment.

They will also exchange views on Japanese and U.S. economic conditions and energy problems including a surge in crude oil prices.

Besides Nishimuro, Hiroshi Okuda, chairman of the Japan Business Federation, and Sony Corp. Chairman Nobuyuki Idei will take part in the conference from Japan.

Participants from the United States will include Deryck Maughan, former vice chairman of Citigroup Inc., and Henry McKinnell, chairman and chief executive officer of Pfizer Inc.

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November 15, 2004, Jiji Press, Japan, U.S. Biz Leaders Ask for China Transparency Measures,

Tokyo, Nov. 15 (Jiji Press)--Japanese and U.S. business leaders on Monday called for China to take further steps to increase the transparency of its investment approval process and adopt strong measures for protection of intellectual property rights.

Concluding the two-day session of the 41st Japan-U.S. Business Conference, the Japanese and U.S. businessmen adopted a joint statement asking for the improvement of the business environment in China.

The conference also urged the Chinese government and companies from Japan and the United States to join forces to address air pollution and other environmental issues.

The statement called on the Japanese government to level the playing field between Japan Post's financial services, including "Yucho" savings and "Kampo" insurance businesses, and their private counterparts.

They also asked the U.S. government to slash the country's current account and fiscal deficits.

The conference was cochaired by Toshiba Corp. Chairman Taizo Nishimuro and Deryck Maughan, former vice chairman of Citigroup Inc.

The next meeting will be held in the United States in late October 2005. Maurice Greenberg, chairman and chief executive officer of American International Group Inc., will replace Maughan as chair from the U.S. side.
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November 25, 2004, Private Banker International, Citi closing trust bank in continuing Japan wealth implosion,

Citigroup is closing its trust bank in Japan in addition to its private banking operations, after chief executive Charles Prince visited Tokyo for what rivals described as a "fall-on-sword" apology over its transgressions in the country's wealth management market.

Cititrust and Banking Corporation, a trust bank subsidiary, will be wound down by mid-October 2005. This unit offers investment management and real estate advisory services.

However, Citigroup intends to retain 400 staff from the private banking operation as well as 150 workers at Cititrust. It will also retain its 50 percent share of the much larger NikkoCiti Trust and Banking, its trust banking joint venture with Nikko Cordial, Japan's third-largest brokerage house.

Public apology

Prince declared, at a packed Tokyo press conference, "I'd like to fully apologize to our customers and the public for the problem that has occurred in our business in Japan and for any concern and inconvenience this has caused." The bank's plan to end its private banking operations is in line with an order issued in September by the Financial Services Agency because of problems with compliance and its management structure. These ranged from failure to implement safeguards against money laundering to misleading customers about the risks of their investments.

In a ceremonial top management disembowelling as a result of the scandal, three senior Citi executives with responsibility for the Japan private banking business, including Peter K Scaturro, head of Citi's private bank, have departed. Todd Thomson, former head of private banking, has taken over from Scaturro. Sir Deryck Maughan, a Citigroup vice chairman and head of Citigroup International and Thomas W Jones, chairman and chief executive of the global investment management division have also left. Citigroup admitted that its private banking division in Japan had weak internal controls and corporate governance due partly to the division's emphasis on revenue and business efficiencies.

Douglas Peterson, the newly-appointed chief executive of Citibank Japan, said the bank has no plans to restart private banking in Japan. He admitted that the group has taken a hit to its reputation in Japan, causing confusion among retail banking customers.

Bad strategic timing

It is also now clear that the closure of Citigroup's private banking operations comes at a particularly bad time strategically, when Japanese clients will likely be looking for ways to salt their cash away, Tokyo bankers said.

In a move against counterfeiting, the Bank of Japan has just started putting new bank notes into circulation - which is likely to pull cash out of the country's large underground economy. Old notes are to be withdrawn from circulation two years from now.

Individuals fear that, as the new currency gains general circulation, their holdings of old notes will draw unwanted regulatory attention. Gold and real estate are expected to be among the destinations for the hoarded cash, although some money could even flow into offshore private banking in Hong Kong, Singapore and Switzerland.

The true scale of Japan's underground economy, based on transactions hidden from the tax authorities and often involving tax evasion, money laundering and drugs deals, is not known. Coins and notes in circulation in Japan account for about 15 percent of national income compared to 6 percent in Germany.

Takashi Kadokura, economist at Dai-Ichi Life Research Institute and an expert on Japan's underground economy, puts the value of hoarded 'futon' cash at the equivalent of $47 billion, but other broader estimates put it nearer a huge $700 billion, if the bona fide cash holdings of traditionally-conservative elderly Japanese are included.

Manoeuvring for Citi clients

Meanwhile, Japanese banks are manoeuvring to try and pick up Citi private clients. Mitsubishi Trust & Banking is targeting 220,000 executives of small and medium-sized companies who need advice on inheritance taxes and asset management. Elsewhere, Mizuho Trust will hold about 200 seminars on inheritance and other wealth issues in coming months aimed at some 6,000 wealthy clients while Sumitomo Trust plans to increase the number of private bankers by 25 percent to 50 by next March.
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December 31, 2004, The Asian Banker Journal, Who, What, Where,

Three senior executives left Citigroup after being found partially responsible for the forced closure of its private bank in Japan. The departing executives are Deryck Maughan, Thomas Jones and Peter Scaturro. Maughan was chairman of Citigroup International, Jones was the chief executive of Citigroup Global Investment Management and Scaturro was chief executive of Citigroup Private Bank. 

Peter Hodgson is replacing Marc Lawrence as Australia and New Zealand Bank (ANZ)'s chief risk officer, reporting to the chief executive officer. Hodgson is currently the managing director of corporate and structured financing of ANZ for Australia, New Zealand and Asia. Kookmin Bank has appointed Kang Chung-won, 53 as its new president. Kang is a career banker who has worked at Korean banks and has experience in American and European banks. 

In Malaysia, Bumiputra-Commerce Bank (BCB) managing director/CEO Dr Rozali Mohamed Ali, 55, has been promoted to group chief executive of parent company Commerce Asset-Holding. Dauk Azmi Abdullah, currently the bank's executive director/chief operating officer, would take over the helm at BCB. India's Centurion Bank has appointed Harpreet Singh as head, branch banking & wealth management services. He was formerly the head of direct business at Tata Teleservices. Singh will be responsible for branch banking, wealth management services, customer service and mortgage products.

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September 28, 2005, Finance Week, Reuters appoints Maughan as non-executive director,

Reuters Group has named Citigroup International's former chairman and chief executive Sir Deryck Maughan as an independent non-executive director. Maughan has served as a member of HM Treasury in London and was most recently chairman and chief executive officer of Citigroup International. 

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October 2, 2006, AFX Europe (Focus) BlackRock, Merrill unit close merger,

NEW YORK (AFX) - BlackRock Inc. and the money-management arm of Merrill Lynch & Co. said Monday that they've completed their previously announced merger, a combination that creates one of the world's largest investment-management firms with over $1 trillion in assets.

BlackRock Chairman and Chief Executive Laurence D. Fink outlined future strategy for the company on Monday, plans to reach out to retail investors, tap into a boom in international capital markets and build up its alternative investments.

An ad campaign set to start running Tuesday in The Wall Street Journal will tout the virtues of the new company, and the firm is also launching a wide-scale rebranding of its products.

As BlackRock attempts to transform itself from an investment management company largely known for fixed-income products sold to institutional investors, it will benefit from a growing similarity between the wants of institutional and retail investors, Fink said in an interview.

"In the last five to 10 years, there's been a growing convergence between institutional and retail investors," Fink said.

Rachel Barnard, an analyst at Morningstar, Inc., said she thinks BlackRock will face a challenge in becoming a manager of equities. "How are they going to become a great equities shop?" she said. "It's completely different distribution, different market. It's a different ball of wax."

Fink downplayed the differences between managing different asset classes, saying that that all of them "require a great team."

BlackRock agreed to acquire Merrill Lynch Investment Managers in February in exchange for giving Merrill a 49.8 percent stake in the combined company. The transaction made asset-management history, along with the recent $3.9 billion asset swap between Legg Mason Inc. and Citigroup Inc.

In September, BlackRock reiterated an earlier outlook for 2007 per-share earnings of $6.10 to $6.60.

A key strategy will be for BlackRock to expand its reach into international capital markets, said Fink, sounding a theme he has revisited often. He noted the boom in initial public offerings in Europe and Asia and "all of the ingenuity now manifesting throughout the world."

"The whole world is adapting to the power of the global markets," Fink said.

To dig deeper into international markets, the firm will build on the strength of MLIM in continental Europe, where it ranks among the top three investment platforms, according to Fink.

In the United States, BlackRock will work on building its image as a mutual-fund provider. While it has only limited experience with these funds, the firm has inherited a huge array of them and other retail products through the Merrill Lynch deal. "In the U.S., BlackRock is not as strong with mutual funds, but the combined platforms will allow us to begin" carving out a niche, said Fink.

BlackRock also plans to build up its presence in alternative investments including hedge funds and private equity. But it will be cautious about how it expands, said Fink. "We won't initiate hedge funds unless we have the right product specialist to do it," said Fink. "You can't just wiggle your nose and say 'I want a hedge fund.' You need the intellectual capital, you need the process and the organizational structure."

On Monday, BlackRock also said its appointed three new directors, bringing its board to 17 members, including nine independents. The new appointees are Sir Deryck Maughan, managing director of Kohlberg Kravis Roberts & Co. and chairman of KKR Asia; Robert C. Doll, BlackRock's vice chairman and chief investment officer of global equities; and Robert S. Kapito, BlackRock's vice chairman and head of portfolio management.

BlackRock shares fell $3.99, or 2.7 percent, to $145.01 in afternoon trading Monday on the New York Stock Exchange.

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October 2, 2006, AFX CNF, GlaxoSmithKline PLC - Director/PDMR Shareholding,

 327 words...Depository Shares (ADS) Sir Christopher Gent 1,755.62 Mr Lawrence Culp 678.66 Sir Crispin Davis 1,053.37 Sir Deryck Maughan 678.66 Dr Daniel Podolsky 254.50 Sir Ian Prosser 790.03 Dr Ronaldo Schmitz 632.02 Mr Tom de Swaan 263.34...

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February 12, 2007, AFX CNF, GlaxoSmithKline PLC - Directorate Change,

 700+ words...Crispin Davis Independent Non-Executive Director Sir Deryck Maughan Independent Non-Executive Director Dr Daniel Podolsky...Committee Chairman Members Audit Mr Tom de Swaan Sir Deryck Maughan Dr Daniel Podolsky Sir Ian Prosser Dr Ronaldo Schmitz...

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January 27, 2012, Pharma, GlaxoSmithKline says several board members will not stand for reelection,

 345 words...chair of the audit and risk committee with effect on 1 January 2013. Swaan will remain member of this committee.Deryck Maughan will succeed Robert Wilson as senior independent non-executive director with effect from the closure of GSK's...

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January 27, 2012, M2 Equity Bites, GlaxoSmithKline reports board changes, 

286 words...Lewent will succeed Tom de Swaan as chair of the Audit & Risk Committee. From the closure of GSK's AGM in 2013, Sir Deryck Maughan will succeed Sir Robert Wilson as senior independent non-executive director. ((Comments on this story may be...

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