Sense on Cents

Was it mere coincidence that JP Morgan’s co-head of investment banking Bill Winters recently voiced his disdain, genuine or not, for banker greed? I shared my assessment of Winters’ comments yesterday in writing, “JP Morgan’s Winters Identifies Problems, But Offers No Solutions.”

Why do I ask? Bill Winters was just shown the door at JP Morgan. Was Winters exacting a pound of flesh as he effectively went down the escalator? Bloomberg provides a measure of insight on these developments in writing, JP Morgan’s Staley to Run Investment Bank in Shake-Up:

JPMorgan Chase & Co. shook up the leadership of its investment bank, surprising analysts by announcing the immediate departure of co-chief executive officer William “Bill” Winters and naming asset-management chief Jes Staley to run the business.

Steve Black, who helped lead the investment bank with London-based Winters, will become executive chairman of the unit, the New York-based bank said today in a statement. Staley will be CEO of the business and Mary Callahan Erdoes, CEO of the private bank, will succeed Staley in running asset management.

These moves within the executive offices at JP Morgan are a classic example of what a friend and former colleague at Bear Stearns once told me about life within the upper-most echelon of Wall Street. He said, ‘the ledge is very narrow and the elbows are razor sharp.’

The simple fact is Winters was the outsider within that executive suite which he occupied with Steve Black. Is Steve Black a good guy? Does it matter? Steve Black has a longstanding relationship with Jamie Dimon from working with him back at Smith Barney in the early to mid-90s. Black, not unlike almost every chief executive on Wall Street, is a master at maneuvering on that ledge.

As for Mr. Winters, do not expect him to offer any statements critical of Black, Dimon, JP Morgan or any parts of JP Morgan’s franchise. Why? When any executive leaves a Wall Street firm, he is required to sign a release which handcuffs him from making any negative comments about the firm. Winters assuredly has significant JP Morgan stock and options outstanding. If he were to comment, he would jeopardize those holdings.

To that end, perhaps Bill Winters’ statement yesterday was his ‘Grove O’Rourke’ in the recently published Top Producer by Norb Vonnegut. What do I mean? Perhaps Winters’  interview in the London Evening Standard, JP Morgan’s London Head Slams ‘Greed’ of Bankers, was his conscience speaking and genuinely voicing his disdain for the greed that infects Wall Street and the City.

LD

Related Sense on Cents Commentary:
JP Morgan’s Winters Identifies Problem, But Offers No Solution (September 28, 2009)