Ben Edwards blasts Wachovia merger
By Dan Jamieson
July 9, 2007
copied from: Investment News .com
IRVINE, Calif. — Ben Edwards III, a former chief executive of A.G. Edwards Inc., is not happy about his family firm’s merger with Wachovia Corp.
Mr. Edwards, who retired in 2001, caused a stir at St. Louis-based A.G. Edwards’ shareholder meeting last month when he read a speech criticizing the deal.
Edwards employees “feel lied to and betrayed,” he said at the meeting.
According to the St. Louis Post-Dispatch, Mr. Edwards received a standing ovation.
The firm’s employees “have been told all along the importance of remaining independent, and how if they contributed to that by working harder and doing more,” they could remain independent, he said in an interview. “And then this [merger] happens.”
Ben Edwards: Ex-CEO of Edwards had some unkind words about deal. Mr. Edwards feels the newly merged company will risk losing A.G. Edwards’ core values.
“We had this business of putting clients first, so our trading departments were service centers, not profit centers, and we gave people a break on money funds and everything else,” he said.
Richmond, Va.-based Wachovia Securities LLC’s “outlook is more like a bank, making money off of interest and spreads and things like that,” Mr. Edwards said.
But “if [Wachovia] makes an effort to adopt our type of policies, the Edwards organization will probably hold together,” he added.
Mergers often are driven by chief executives who have nothing better to do, Mr. Edwards said.
“If you do a good job and have competent people in charge ... you sit there as the highest-paid person in the company and do nothing. So [CEOs try to] acquire or diversify or do [other] big things.”
Mr. Edwards said he instead focused on visiting 100 branch offices a year to stay in touch with clients and brokers.
“That kept me out of trouble at headquarters,” he said.
| Wachovia unit ordered to pay $17.8M
copied from: The Business Journal of the Greater Triad Area
Thursday, January 30, 2003
The National Association of Securities Dealers says a unit of Wachovia Corp. must pay $17.8 million in damages to settle charges it lied to a client about accounts.
The suit involved an investor, L.R. Castelein, who filed a claim in 1999 against Corporate Securities Group Inc., which later was bought by what is now Wachovia. The former Corporate Securities is now called Wachovia Securities Financial Network Inc.
The suit alleged a breach of fiduciary duty, misrepresentation and violation of NASD and New York Stock Exchange regulations.
According to the NASD ruling, Douglas Reid, the branch manager of Corporate Securities' Charlotte office, led Castelein to believe he set up a $12.5 million brokerage account in Castelein's name with Bear Sterns when the account was really with Corporate Securities.
The ruling also found that Reid forged trading authorization documents and engaged in heavy trading activity in the account, generating higher than normal commissions for him.
According to the NASD, Reid also transferred funds out of the account to third parties without authorization.
Under the award, Wachovia Securities Financial and Reid were ordered to pay $4.1 million plus accumulated interest in compensatory damages and $12.3 million in punitive damages.
As clearing agent, Bear Sterns was ordered to pay compensatory damages of $200,000.
Corporate Securities was bought by First Union Corp. in 2000, and renamed First Union Financial Network Inc.
First Union bought the old Wachovia in 2001 and adopted Wachovia's name.
Castelein was represented by Charlotte attorneys David Rudolf and Thomas Maher of Rudolf, Maher, Widenhouse & Fialko.
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