Montgomery's Top Junk Bond Exec Quits

Bloomberg News

NationsBanc Montgomery Securities' Jerome Markowitz resigned as a senior managing director at the investment bank, following the resignation of chief executive and founder Thomas Weisel and a dispute over control of the firm's junk bond business. The departure of Markowitz, 59, comes after Charlotte, N.C.-based NationsBank Corp. broke a promise it made last year, when it bought San Francisco-based Montgomery for $1.2 billion, to let the firm manage trading, sales and research for high-yield bonds. Markowitz ran those departments, until they were given to NationsBank executive Thomas White in July. The resignations highlight the conflicts that can arise when a commercial bank buys an investment bank, pitting a highly regulated, bureaucratic culture against the more freewheeling world of the securities business. Junk bond prices plunged and yields jumped in recent months as investors, fearing a global recession that could raise the risk of defaults, moved funds into the safety of U.S. government securities. NationsBank is acquiring BankAmerica Corp. in a transaction that will create the largest U.S. bank. Montgomery will run the stock underwriting and trading business for the combined bank.

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