BT Reassigns 5 Execs Who Sold Derivatives to Procter & Gamble and Gibson Greetings
Tomasula, Dean, American Banker
In a move that industry obsewers speculate could eventually work against it, Bankers Trust New York Corp. has undertaken an internal review of its derivatives sales practices and reassigned five executives who were directly involved in selling financial instruments to Procter & Gamble Co. and Gibson Greetings Inc.
The observers noted that the reassignments could be viewed as an admission of fault by Bankers Trust, giving Procter & Gamble and Gibson Greetings the upper hand in their separate lawsuits against the bank.
Those lawsuits charged Bankers Trust with using pressure tactics, intentionally misleading its clients, and withholding information from them.
Bankers Trust insists its sales practices were above board and denies the charges in the lawsuits.
A spokesman for the bank said its reassigning of the executives comes after a lengthy internal investigation of its derivatives business. "We are satisfied that these are isolated incidents and that it is in no way a systemic problem," the spokesman said.
While the spokesman refused to name the reassigned employees, both The New York Times and The Wall Street Journal have identified one of the executives involved as managing director Jack Lavin, who was in charge of corporate derivatives coverage. A member of his group, managing director Gary Missner, also has been identified as being reassigned.
Neither could be reached for comment.
The bank will also merge its corporate derivatives coverage group with its financial institutions sales force. …