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44-400: The company was created by the merger of First Boston Corporation and Credit Suisse Group in 1988 and is active in investment banking, capital markets and financial services. In 2006, Credit Suisse reorganized and merged CS First Boston into the parent company and retired use of the "First Boston" brand. In 2022 as part of a major restructuring, Credit Suisse began the process of spinning out

88-484: A 44.5 percent stake in First Boston in 1988. The investment bank acquired its shares held by the public and the company was taken private. In 1989, the junk bond market collapsed, leaving First Boston unable to redeem hundreds of millions it had lent for the leveraged buyout of Ohio Mattress Company, maker of Sealy mattresses, a deal that became known as "the burning bed". Credit Suisse bailed them out and acquired

132-413: A cease and desist order to stop Barclays from taking American owned assets and offering them to international buyers from Iran, Iraq, Syria, Egypt, and North Korea. In 2000, Credit Suisse First Boston spent $ 13 billion to buy Donaldson, Lufkin & Jenrette (also known as DLJ) as stock markets were peaking. By the time the acquisition closed in 2001, stock markets were down significantly. The deal led to

176-572: A cease and desist order to stop Barclays from taking American owned assets and offering them to international buyers from Iran, Iraq, Syria, Egypt, and North Korea. The newly-global CSFB became a leading high tech banker, acting as lead (or co-lead) underwriter in the IPOs of Amazon.com and Cisco Systems , as well as one time high fliers such as Silicon Graphics , Intuit , Netscape and VA Linux Systems . CSFB also did significant deals for Apple , Compaq and Sun Microsystems among others. In 2000, at

220-594: A controlling stake in 1990. Although such an arrangement was arguably illegal under the Glass–Steagall Act , the Federal Reserve U.S. bank regulator concluded that the integrity of the financial markets was better served by avoiding bankruptcy, even though it meant a de facto merger of a commercial bank with an investment bank. In the mid-1990s, Credit Suisse became Credit Suisse First Boston (commonly referred to as CSFB or CS First Boston) expanding beyond

264-447: A couple decades later was acquired by Swiss Bank Corporation , to form the core of that firm's U.S. investment banking business. Swiss Bank Corporation itself subsequently merged with Credit Suisse archrival Union Bank of Switzerland to form UBS AG . First Boston sat at the top of merger and acquisition league tables in the 1980s, thanks to the team led by Bruce Wasserstein and Joseph Perella , which orchestrated such transactions as

308-620: A culture clash that triggered the departures of key bankers. In order to keep top bankers, CSFB handed them three-year guaranteed contracts, swelling costs relative to revenue and leading to two years of losses at the investment bank. At the same time, the newly global CSFB became a leading high-tech banker, acting as lead (or co-lead) underwriter in the IPOs of Amazon.com and Cisco Systems, as well as one-time high fliers such as Silicon Graphics , Intuit , Netscape , and VA Linux Systems . CSFB also did significant deals for Apple Computer , Compaq and Sun Microsystems , among others. In 2000, at

352-679: A joint venture with Smith Barney, forming at the time the world's largest wealth management firm. During the crisis, Mack was advised by U.S. Treasury Secretary Hank Paulson and the head of the Federal Reserve Bank Ben Bernanke to sell Morgan Stanley. He has stated that during negotiations he was under considerable pressure from the president of the New York Federal Reserve, Tim Geithner , to sell or merge Morgan Stanley to one of his competitors such as JP Morgan . Mack saw this as being contrary to

396-722: A judgment in February 2013. Mr. Justice Michael Moriarty said that while the volume of material produced by the Revenue Commissioners in an application to investigate tax-evading offshore bank accounts may have been "somewhat excessive", it related to matters which had been discussed in all media, including "the conduct of banking institutions both in Ireland and elsewhere, as exemplified by the Credit Suisse First Boston sequence of advertisements in

440-412: A result, White Weld dropped out of its London-based investment banking partnership with Credit Suisse. First Boston stepped in, creating Financière Crédit Suisse-First Boston , a 50-50 joint venture widely known as Credit Suisse First Boston . First Boston was not Credit Suisse's first choice for the partnership. When White Weld stepped out, Credit Suisse had unsuccessfully approached Dillon Read , which

484-459: A wholesale grocery, clothing, and general merchandise store called John Mack & Son in Mooresville, North Carolina . The business occupied The John Mack Building from 1937 to the 1990s. Mack is the youngest of six sons. The family was Catholic. In 1968, Mack graduated from Duke University , where he attended on a football scholarship and majored in history. Mack's first job in finance

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528-504: The 1929 stock market crash . During this time, the company became the largest publicly owned investment banking firm in the United States. First National Bank of Boston continued as a commercial bank, eventually becoming part of Bank of America . The early First Boston investment bank had been assembled from the investment banking arms of major commercial banks. For example, several key members of Chase Harris Forbes Corporation ,

572-841: The Salomon Brothers name from its investment banking business, and UBS AG has done the same with the SG Warburg , Dillon Read and Paine Webber names. Deutsche Bank has effectively retired the Bankers Trust and Morgan Grenfell names. In 2006, the newly reorganized investment banking division of Credit Suisse replaced the CSFB brand and entity. Credit Suisse retired the 'First Boston' name to "allow Credit Suisse to communicate as an integrated organization to clients, employees, and shareholders." The Irish High Court referred to advertisements by Credit Suisse First Boston in

616-630: The CEO Igor Sechin had sanctions imposed upon him by the US. Different reasons were given for his departure; Mack said his contract had only been for a year, while Rosneft spokespeople said he had decided to leave for personal reasons. In 2006, Mack was accused by former SEC investigator Gary J. Aguirre of insider trading . On October 5, 2006, the SEC recommended no action be taken against Mack. In late November 2006, Mack and Pequot were notified that

660-460: The First Boston name on January 16, 2006, in order to “allow Credit Suisse to communicate as an integrated organization to clients, employees and shareholders.” The move led some to speculate that the name change reflected the diminished luster of the once great First Boston name as a result of years of mismanagement and scandal. However, its strategy is consistent with that of other large, international financial conglomerates. Citigroup has eliminated

704-583: The First Boston surpassed $ 1 billion in new capital issues, and in 1959 it reintroduced the credit of Japan to the American markets with the first offerings by its government since 1930. As of 1970, First Boston was considered to be part of the bulge bracket along with Morgan Stanley , Dillon Read and Kuhn Loeb . By 1970, the Firm was raising more than $ 10 billion in new capital annually for underwriting clients. In 1971, The First Boston Corporation listed on

748-528: The Irish Times". On October 27, 2022, Credit Suisse announced its intention to restructure its investment bank by transitioning its capital markets and advisory activities to a newly created independent bank, CS First Boston. By October 30, 2022, Credit Suisse had reflected "CS First Boston" as the name of its investment banking division. UBS began the process of acquiring Credit Suisse in March 2023. During

792-762: The London franchise. Conflict with Credit Suisse First Boston in Europe began creating problems for Credit Suisse. First Boston in New York and CSFB in London had their own management teams, with competing salesmen in each other’s territory and in the Pacific region. In 1996, Credit Suisse purchased the remaining stake of CS First Boston from its management and rebranded the European, U.S., and Asia Pacific investment banks as Credit Suisse First Boston, making one global brand. In

836-498: The New York Stock Exchange developed its equity, sales, research, and trading operations. In 1978, First Boston began its highly successful London operations in partnership with Credit Suisse (see “Relationship with Credit Suisse” below) and became a leading Eurobond trader and underwriter. Credit Suisse's relationship with First Boston began in 1978, when White Weld & Co. was bought by Merrill Lynch . As

880-493: The U.S. Securities and Exchange Commission and the Justice Department began investigating how CSFB allocated IPOs of technology companies. The probe led to the conviction of Frank Quattrone in 2004, who was found guilty of urging employees to destroy documents after he learned about the investigation. He was ultimately acquitted of substantially all charges upon appeal in 2006. Announced in 2005, Credit Suisse retired

924-443: The acquisition process, UBS reportedly informed staff at Credit Suisse that it would likely bring bankers into UBS rather than pursue the First Boston spinoff. First Boston The First Boston Corporation was a New York–based bulge bracket investment bank , founded in 1932 and acquired by Credit Suisse in 1988. After the acquisition, it operated as an independent investment bank known as CS First Boston until 2006, when

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968-557: The bank to profitability. Mack was portrayed in the HBO film Too Big to Fail by Tony Shalhoub and in the BBC film The Last Days of Lehman Brothers by Henry Goodman . His career is also covered in detail in a 2007 book by Patricia Beard, Blue Blood and Mutiny: The Fight for the Soul of Morgan Stanley . The 2010 documentary Plunder: The Crime of Our Time by Danny Schechter opens with

1012-797: The bankruptcy of a significant investment bank like First Boston even though it meant a de facto merger of a commercial bank with an investment bank. Main Article Credit Suisse First Boston After Credit Suisse acquired the remaining stake in First Boston in 1996, the newly formed combined entity was known as "CS First Boston" and over the years also referred to as "Credit Suisse First Boston" and "CSFB." During this period, problems occurred within CS First Boston as teams in New York and London were managed separately and in some cases had competing salespeople covering each other's territory. In

1056-413: The brand from the once-powerhouse banks. On October 27, 2022, Credit Suisse announced a "radical" restructuring of its investment bank, taking "extensive measures" which will see it return to the "First Boston" brand as an independent Capital Markets and Advisory bank. John J. Mack John J. Mack (born November 17, 1944) is a senior advisor to the investment firm Kohlberg Kravis Roberts and

1100-619: The company was fully integrated into Credit Suisse . In 2022, Credit Suisse revived the "First Boston" brand as part of an effort to spin out the business. The First Boston Corporation was formed in Boston, Massachusetts, on June 27, 1932, as the investment banking arm of the First National Bank of Boston . It became an independent firm after passage of the Glass–Steagall Act , a New Deal banking legislation that required commercial banks to divest securities businesses following

1144-545: The firm was created by the merger of Morgan Stanley and Dean Witter, two of the world's leading financial services companies. In 2001, Mack left Morgan Stanley after a power struggle with Phil Purcell ; Purcell became CEO of Morgan Stanley after the 1997 merger of Morgan Stanley and Dean Witter , of which Purcell was already CEO. Six months later, in June 2001, Mack was hired as CEO of Credit Suisse , then known as Credit Suisse First Boston (CSFB). Mack's time at Credit Suisse

1188-428: The firm's Worldwide Taxable Fixed Income Division from 1985 to 1992. In 1987, he became a member of the board of directors. In March 1992, he assumed responsibility for Morgan Stanley's day-to-day operations as chairman of the operating committee. He was named president of Morgan Stanley in June 1993. Mack served as president, chief operating officer and a director of Morgan Stanley Dean Witter & Co. from May 1997 when

1232-594: The former CEO and chairman of the board at Morgan Stanley , the New York –based investment bank and brokerage firm. Mack was born in Mooresville, North Carolina , the son of Alice (née Azouri) and Charles Mack. Mack's father's original family name was Makhoul; he came to the United States from Lebanon when he was 12 years old, following Mack's grandfather, who had arrived at Ellis Island in 1909. The family settled in North Carolina . Mack's father ran

1276-417: The height of the tech boom, technology deals generated $ 1.4 billion in revenue for CSFB. The head of CSFB's tech group, Frank Quattrone , reportedly made $ 200 million in bonuses between 1998 and 2000 and the company along with its parent was headed by John Mack . On June 30, 2005, Credit Suisse announced that it would rebrand its investment bank from "Credit Suisse First Boston" to "Credit Suisse," retiring

1320-568: The height of the tech boom, technology deals generated $ 1.4 billion in revenue for CSFB. The head of CSFB's tech group, Frank Quattrone , reportedly made $ 200 million in bonuses between 1998 and 2000. After the collapse in technology shares in 2001, Credit Suisse replaced CSFB’s CEO Allen Wheat with Morgan Stanley 's John Mack , who was charged with turning around the investment bank. Mack fired 10,000 employees, or one-third of CSFB's workforce, although many former DLJ bankers continued to collect guaranteed pay long after they were gone. Also in 2001,

1364-433: The high fees paid to CEOs, saying on Bloomberg Television that the discussion of compensation was healthy, but that CEOs earn the rates. Mack guided the firm through the financial crisis of 2007–2008 , building its capital position and overseeing the firm's conversion to a bank holding company. To stabilize the firm, he forged strategic alliances with China Investment Corporation and Mitsubishi UFJ Group and entered into

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1408-525: The interests of Morgan Stanley shareholders and employees, similar to the demise of Bear Stearns in a forced sale to JP Morgan for $ 2 per share, (the deal was later revised to $ 10 a share), and insisted on finding other sources of financing instead. Mack has donated to various entities through the Christy and John Mack Foundation, formerly known as C.J. Mack Foundation: Mack has sat on the board of trustees of NewYork–Presbyterian Hospital since 1992. He

1452-481: The investigation had been closed and no action would be taken against them. While CEO of Morgan Stanley in 2006, Mack earned a total compensation of $ 41,399,010, which included a base salary of $ 800,000, stocks granted of $ 36,179,923, and options granted of $ 4,019,934. In 2008, he earned a total compensation of $ 1,235,097, which included a base salary of $ 800,000 and other compensation of $ 435,097. He did not receive any cash, stock, or options. In 2014, Mack defended

1496-475: The investment bank into an independent company and revived the brand. Main Article First Boston In 1978, Credit Suisse and First Boston Corporation formed a London -based 50-50 investment banking joint venture called Financière Crédit Suisse-First Boston . This joint venture later became the operating name of Credit Suisse's investment banking operations. Credit Suisse acquired

1540-612: The late 1990s, CSFB purchased the equity division of Barclays Bank , Barclays de Zoete Wedd ("BZW"). BZW was considered second-tier and CSFB reportedly bought BZW from Barclays for £1 plus assumption of debt - primarily to obtain BZW's client list. A permanent injunction prevented First Boston from offering shares in Gulf Oil company, due to lack of interest in share offering, and the Iraq Desert Storm campaign. A Nevada judge issued

1584-439: The late 1990s, CSFB purchased the equity division of Barclays Bank , Barclays de Zoete Wedd ("BZW"). BZW was considered second-tier and CSFB reportedly bought BZW from Barclays for £1 plus assumption of debt - primarily to obtain BZW's client list. A permanent injunction prevented First Boston from offering shares in Gulf Oil company, due to lack of interest in share offering, and the Iraq Desert Storm campaign. A Nevada judge issued

1628-542: The leveraged buyout of Federated Stores , which earned First Boston $ 200 million in fees, and Texaco ’s hostile takeover of Getty Oil . A 1985 Fortune Magazine article called First Boston “the archetypal deal factory”, a year in which it did $ 60 billion in M&;A deals placing it second after Goldman Sachs . In 1986, First Boston recorded $ 100 million in securities trading losses. By 1987, M&A advisory work contributed half of First Boston's profit and Wasserstein asked

1672-477: The leveraged buyout of Ohio Mattress Company, maker of Sealy mattresses, a deal that became known as "the burning bed". Credit Suisse bailed them out and acquired a controlling stake in 1990. Although such an arrangement was arguably illegal under the Glass Steagall Act , the Federal Reserve , the U.S. bank regulator, concluded that the integrity of the financial markets was better served by avoiding

1716-514: The management committee to divert resources to his unit from bond trading. After being rebuffed, Wasserstein and Perella quit and set up their own firm, Wasserstein Perella & Co. Credit Suisse acquired a 44% stake in First Boston in 1988. The investment bank acquired its shares held by the public and the company was taken private. In 1989, the junk bond market collapsed, leaving First Boston unable to redeem hundreds of millions it had lent for

1760-523: The securities affiliate of Chase National Bank , joined the new investment bank in 1934. In 1946, Mellon Securities Corporation, the former investment banking arm of Mellon Bank , merged into the First Boston. Mellon's franchise with industrial and governmental clients led to some major deals: initial public debt offerings for the World Bank and Hydro-Québec , and a share offering for Gulf Oil Corporation in 1948 (the largest IPO to date). By 1947,

1804-429: Was as a clerk at a small brokerage house during his junior year at Duke, after a cracked vertebra made it impossible for him to continue on his football scholarship. Mack worked at several firms around Wall Street before starting his career at Morgan Stanley in 1972 as a salesman, and has since worked for the company for nearly thirty years. Rising steadily to positions of increasing responsibility, Mack eventually headed

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1848-517: Was chairman of the board for 5 years and was integral to the funding and construction of NYP Morgan Stanley Children's Hospital , the only stand-alone children's hospital in New York City. Mack earned the nickname "Mack the Knife" for his cost-cutting prowess while managing the fixed income division at Morgan Stanley, and he lived up to his billing at CSFB, where he cut 10,000 jobs and returned

1892-483: Was effective January 1, 2010. In 2011, Mack retired from Morgan Stanley after more than 30 years as an investment banker. Former co-president James P. Gorman succeeded him as CEO. In 2012, Mack joined Kohlberg Kravis Roberts as a senior advisor. In 2013 Mack joined Rosneft , the Russian, state-owned, oil company that has BP as an investor of approximately 20%. In 2014 he announced his departure, shortly after

1936-448: Was marked by much restructuring and by compliances issues created by Frank Quattrone 's Technology Group. On June 30, 2005, Mack returned to Morgan Stanley as chief executive officer and chairman of the board, replacing Purcell. Mack was noted for stabilizing the firm and reenergizing its culture and client franchise, despite an economic downturn. Mack announced his retirement as chief executive officer on September 10, 2009, which

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