NEW YORK — Bear Stearns chief executive James “Jimmy” Cayne confirmed Tuesday he will give up day-to-day control of the fifth-largest U.S. investment bank amid unprecedented losses from the subprime mortgage crisis.
Cayne, 73, will serve as non-executive chairman, according to an internal memo obtained by The Associated Press. President Alan Schwartz will succeed him as CEO. Cayne added that his new role as non-executive chairman will be in an “advisory capacity” to Schwartz, and he is no longer an employee of Bear Stearns.
The shake-up had been expected and is just the latest to hit the executive suites of America’s biggest investment houses. The subprime crisis already claimed Merrill Lynch CEO Stan O’Neal and Citigroup CEO Chuck Prince.
Cayne led Bear Stearns to its first loss since its founding in 1923 after it took a $1.9 billion writedown in the fourth quarter. He had been under pressure since the summer when two hedge funds managed by Bear Stearns collapsed.
