Meet The Genuity Six: The Kingpin, Kassie

         The Ballad of David Kassie
    Davey grew the firm with boss, John Hunkin,
    Then he got the kiss-off when things went bad.
    Davey took Hunkin's guys to Genuity,
    Lonesome Johnny sued, now everybody's sad.
The Canadian Imperial Bank of Commerce has had some bad luck in the new century

The Ambitious Boss

    "John Hunkin courted risk and vowed boldness...He rose through the ranks of CIBC's investment banking arm and, in 1999, won a fierce competition for the CEO post.

    At the time, he was still basking in the glory of the bank's blockbuster deal with Global Crossing...

    CIBC had invested US$41 million in the carrier, becoming banker and adviser to the firm, and parlayed that into a US$1.7-billion payday.

    Hunkin planned to use World Markets, the brokerage and investment bank he'd helped build, as a springboard into the U.S., led by his ace deal maker, David Kassie."
The Problems

    "The first major sign of trouble came in 2002, when Global Crossing collapsed amid allegations of improper accounting.

    Then Enron bankruptcy investigators alleged CIBC was one of several banks that helped structure some of the shady transactions which led to the energy dealer's death spiral.

    The bank paid $80 million to settle charges related to the Enron fraud and set aside another $300 million to deal with further legal claims.

    In 2002, CIBC reported its worst results in a decade. To atone, Hunkin and Kassie gave up their annual bonuses.

    The following of its bankers was accused of facilitating illegal trading in U.S. mutual funds." Steve Maich, Dec 20, 2004

    "CIBC is accused of lending $1-billion to the hedge funds which allegedly engaged in the illegal mutual fund trades.

    New York State Attorney General Eliot Spitzer says he has a memo from a CIBC executive which described to others at the bank how to break the law and engage in this illegal trading!"

    David Akin: February 27, 2004

    "Paul Flynn faces five felony charges, including grand larceny, under New York state law for his role in allegedly providing loans to hedge funds which used the money to finance illegal late trading. Flynn is accused of pocketing $1 million US." Feb. 3 2004
The Fall Guy

    "Almost unbelievably, Hunkin, in his speech to shareholders, suggested that the ethical breaches that led to these fines was a result of being "encouraged" by shareholders and the media to be aggressive.

    Hunkin said that, as CEO, he had to take responsibility for the harm to CIBC's reputation last year.

    What Hunkin actually took wasn't responsibility but a $3.3-million bonus, part of an overall pay packet worth $10.7-million.

    The guy who actually took responsibility was David Kassie, Hunkin's good friend. Hunkin fired him a few days after Flynn was charged".

    David Akin: Feb 27, 2004:

    "David Kassie, one of the most successful and best paid investment bankers in Canada, has suddenly resigned as head of CIBC World Markets 'to focus on other interests', CIBC announced Thursday.

    'David Kassie is a superb investment and merchant banker,' CIBC CEO John Hunkin said in a release.

    'I am sure he will find success in whatever endeavor he chooses to pursue and, on behalf of CIBC, I wish him all the best.'" Thurs Feb 5, 2004
The Return

    "In its court filing, CIBC said Kassie began planning with Evershed, Daviau and former CIBC vice-chairman Earl Rotman 'immediately' after leaving the bank to set up a competitor staffed with the bank's top people.

    In an Aug. 16 email, Evershed sent Kassie a detailed business plan for Genuity. It included a 'dealer depth' chart with the names of 55 people, including 39 CIBC bankers, that Genuity wanted to hire.

    Kassie broke his 'fiduciary and contractual' duties to CIBC, the bank said."

    "But Genuity has a key advantage. The bank-owned dealers pay big bonuses, but can't offer partnerships. Investment bankers are infused with the cult of equity, and Kassie has equity on offer.

    Nab stars and you inherit their relationships--their connections to CEOs who want to buy companies, sell divisions, raise equity or launch income trusts."

    Eric Reguly: Globe and Mail: Fri Dec 24, 2004
David Kassie : Resume

1979: MBA University of Western Ontario
1977: B.Comm (Honours) McGill University
- basketball player on varsity team.

1979-2004 CIBC
Last Position: Chairman CEO CIBC World Markets, Vice Chairman CIBC. Head of the U.S. region. Ex-Head of Global Investment and Corporate Banking. Responsible for integrating investment and corporate banking. Built CIBC World Markets' U.S. business.

Advisory Roles: on boards of Alliance Atlantis Communications, Roots Canada, Hospital for Sick Children, Women in Capital Markets, Ivey School of Business; Chairman University of Guelph Campaign

See Also: Genuity Gang Strikes Back -- CIBC Recruiting Scandal -- David Kassie, Kingpin -- David Kassie's Dream -- Dan Daviau -- Earl Rotman -- Kassie Defiant -- Phil Evershed -- Hirst, Morrison, Eggertson -- Marie Cordero -- Bad 4 Recruiters -- Sweet Marie -- The Kassie Cult -- Kassie Honoured -- Hunkin's Millions -- BlackBerry Got 'Em -- Kassie Family Hunted -- Blackberry Mystery Solved -- The Genuity Revolution -- Technorati Tag:

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