General Course Information

B55.2310.30 Managing Financial Businesses

Responding to Change in a Competitive World

Fall 2007   DRAFT

Room  MEC 2-60

Wednesday 6 - 9 pm

Instructor Information

Professors White, Zeikel and Zicklin


Course Description and Objectives


This course will investigate the management of financial service organizations during a period of rapid regulatory, cultural and technical change and culminating in today’s lower growth and more heavily regulated environment. The view of the course is from the “executive suite”. What are the issues that concern top executives of financial service firms? The course will start with an examination of the major trends impacting financial institutions and then look at particular industries and institutions for valuable lessons. The course focuses on three main themes; strategy and its execution, managing culture, and managing technology. Course requirements will be a written case and a final exam as well as class participation. Classes will be a combination of lectures and outside speakers, many of whom are respected leaders in their field.


Course Requirements:

Students are expected to read the Wall St. Journal.  There will be many instances where the syllabus and the news will intersect and your instructors will take advantage of those unfolding events to illustrate the objectives of the course.  Most classes will have background readings online and you should be checking  the Blackboard course management system at

Attendance will be taken and will be a factor in the grading process.  Finally, students will be expected to have read the material and be prepared to discuss it if called upon.  In a class of this size, it is imperative that nametags remain in front of you in order to help the instructors identify who is speaking.

Teaching Method


Class Preparation

Required Reading – Capital, The Untold Story of the Capital Group's Long-Term Investment Excellence by Charles Ellis

“Confessions of a Wall Street Analyst” by Dan Reingold


Some Suggested Readings for your own interest:

 “The World is Flat”, Thomas Friedman  “Conspiracy of Fools”, Kurt Eichenwald,   "Dead Bank Walking: One Gutsy Bank's Struggle for Survival and the Merger That Changed Banking Forever", Robert H. Smith, Michael K. Crowley, The Greatest Story Ever Sold" by John Cassidy, “Tearing down the Walls: How Sandy Weill fought his way to the top of the financial world and nearly lost it all”, by Monica Langley



Mid Term Case                         30%

Final Exam                               50%

Class Participation                    20%


The Faculty


Norman White is a Clinical Associate Professor in the Information, Operations and Management Science department’  He is currently Acting Director of the Center for Digital Economy Research at the Stern School

Arthur Zeikel is an Adjunct Professor in the Finance Department and retired Chairman, President and CFO of Merrill Lynch Asset Management.

Larry Zicklin is a Clinical Professor of Finance and former CEO and Chairman of Neuberger Berman.




 (Subject to change, based on speaker availability, check Blackboard for updates)



Session #1



Course Overview, Financial Service Components

Part I - Course Overview: Forces of Change

Appetite for capital, the growth in demand for investment funds

Globalization of Financial Services

Conflicts in Financial Services

The Essence of Strategy, Managing Change

Part II - Full Service Brokers and What Will Become of Them?



Part II--Brad Hintz; Equity Analyst SC Bernstein and Former Managing Director Lehman Corp. and Morgan Stanley--confrimed


·        On the Threat of Change, Zeikel

·        Points of Inflection: Investment Management Tomorrow, By Peter L. Bernstein, Financial Analysts Journal, July/August 2003, pp 18-23

·          U.S. Securities Industry/ Institutional Equities-Searching for a New Business Model by Brad Hintz

·          The Merrill Lynch-BlackRock Deal Signals Major Shift in Financial Services by Wharton Finance and Investment



Session #2



Part I -The Critical Nature of Technology in the Financial World—especially in M&A
Part II - The Universal Bank – History and Application Today


Part I-Mel Taub - Former Chief Technology Officer, Citigroup, Global Technology Management

Part II - Prof. Roy Smith--confirmed


·        Thinking Big—Economist Report, 5/20/2006

·        The Future of Financial Services—Revisited by Federal Reserve Vice-Chairman Roger W. Ferguson, Jr.

·        Inside Wall Street’s Culture of Risk by Emily Thornton

·        Chief Calls Deal a Dream for Wachovia—Julia Creswell

·        The New Number One, Bank of America, Economist 7/29/06





Session #3



Part I – The changing nature of markets-Is it good for investors?

Part II –Culture--Compensation issues, equity, free agency;  loyalty and behavior  --



Part I --Robert Schwartz –Marvin M. Speiser Professor of Finance Baruch College and University Distinguished Professor at CUNY

Part II--Roy Zuckerberg --Retired Partner Goldman Sachs Former Head of Equity Division and member of the Executive Committee



·        Mergers are no cure-all for exchanges by David Lascelles

·        Stock Exchanges Grudge Match by Aaron Luchetti and Jennifer MacDonald

·        A Clash of the Exchange Titans by Jenny Anderson

·        Zookeeping, R. Smith (Blackboard)

·        Why Dream Teams Fail by Geoffrey Colvin

·        One for All” or “One for One?” The Trade-off between Talent and Disruptive Behavior--Human Resources at Wharton

·        On Top of the World—Economist 4/29/06

·        The Leadership Factory, Business Week 6/12/06


Session #4



Part I – Changing Market Structure-The Outsiders

Part II—State Street Corp.—An Alternative Model-Larry Zicklin



Part I -- Guest Speaker - Seth Merrin, CEO, Liquidnet

Part II—Larry Zicklin

Additional reading(s)

·        Merrill Report on US Market Structure

·        Global Custody Pg.1, Outsourcing increasingly the model of choice by Pauline Skypala

·        Global Custody: Pg. 3, Cultural fit is all-important…by Brian Bollen

·        Global Custody: Pg. 4, The birthplace of the industry….by Jennifer Hughes

·        Global Custody Pg. 4, Fees fall as the battle intensifies by Jennifer Hughes





Session #5



Private Limited Partnerships (Private Equity, Hedge Funds etc.)

Part I – Private Equity, What is it and Where is it going?

Part II – Hedge Funds, the next bubble?


Part I - Jim Brown, Partner, T.H. Lee

Part II - Marc Sulam, General Partner, Healy Circle Partners

Additional reading(s)

·        Early Matters: Creating Value Through Operations at Portfolio Companies-- Knowledge at Wharton

·        An Impressive Miracle of Capitalism- Briefing Notes: Private Equity: Peter Smith

·        Buy It, Strip It, Then Flip it—Business Week, 8/7/06

·        Barbarians at the Top—Fortune, 8/21/06

·        No Victors, Few Spoils in This Fight by Joe Nocera

·        Buy-out funds take on more risk—Francesco Guerrera and James Politij

·        Private Money: The New Financial Order—Greg Ip and Henry Sender



Session #6



Part I Class actions and risk in the financial markets

Part II- Manufacturing, Distribution and Marketing on Wall Street –Where is the competitive advantage?—Arthur Zeikel



Max Berger and Sean Coffey, Partners at Bernstein, Litowitz, Berger & Grossman LLP.


Additional reading(s)

·        WorldCom: How a Ground-Breaking Litigation Altered the Legal Landscape For Large Securities Class Actions and Forced Wall Street To Forever Change Its Ways—Institutional Investor Advocate

·        Breaking The Banks: The inside story of the $6.1 billion WorldCom settlement—Litigation 2005

·        Back In Action, Business Week, 6/26/06

·        Coming Together, Institutional Investor, 7/06????

·        Quarterly Mutual Funds Review-A Whole New Look At Mutual Funds by Tom Lauricella



Session #7



M&A on Wall Street, Leadership


Part I – M&A on Wall Street  - Putting it together – taking it apart – Three Recent Transactions (Citigroup/Legg Mason: J.P. Morgan/Bank of New York: and Merrill Lynch/Blackstone:) Why these unique transaction structures?


Part II – Wall Street and the Research Analyst- Dan Reingold


Part I- Catherine Murray –Neuberger Berman Banking Analyst 

Part II Dan Reingold former Telecom analyst at Morgan Stanley, Merrill Lynch and CSFB and author of “Confessions of a Wall Street Analyst”

Additional reading(s)

·        Banking On Brashness by Bernard Condon

·        From pit to pinnacle: Why traders are calling the shots on Wall street Banking: --Peter Thal Larsen

·        IPO Auctions; What a Capital Idea—Joe Nocera





Session #8



Part I – Entrepreneurs in the Financial Markets


Part II – Leadership--Arthur Zeikel




David A. Jones—Independent Advisor and Trustee for Wealthy Families


·        The Contender. In This Corner Jamie Dimon the New CEO of J.P. Morgan Chase by Shawn Tully

·        Why Principled Leadership Brings Profit and Pride to BB&T-Business Ethics Emory

·        The Leadership Factory by Joseph Weber




Session #9



Part I--Index Funds: Does Low Cost Equal High Value?

Part II - Selling Out and Being Sold Out Before Building Up


Part I - Jack Bogle – Founder Vanguard, Index funds
Part II - Alexandra Lebenthal, Former President and CEO Lebenthal &Co.


·        Today’s Research Question: Why Do Investors Choose High-fee Mutual Funds Despite Lower Returns? By Wharton Finance and Investment

·        First Of All, I’m An Honest Guy-by Holman W. Jenkins Jr.

·        Turn On a Paradigm—by John C. Bogle and Burton G. Malkiel


Session 10



Part I-Wall street Scandals –Salomon Brothers

Part II-Managing Under a Microscope:  The Manager and the Media



Part I Tom Strauss Former President of Salomon Brothers

 Part II Charlie Gasparino,  investigative reporter, TV Commentator and Author of  “Blood on the Street”


·        Warren Buffett’s Wild Ride At Salomon by Carol J. Loomis


Session 11



Influencing Change: Both From Within and From Without


Part I – Charles Ellis, Author of “Capital”

Part II- Part II -  Risk and Reputation – Larry Zicklin

Textbook reading(s)


·        Capital


·        SEC Charges Millenium Partners, L.P., Israel Englander and Others for Engaging in Fraudulent Market Timing--U.S. Securities and Exchange Commission Release

·        Mastering Uncertainty by Rob Goffee and Gareth Jones

·        Deals and Consequences—Landon Thomas Jr.

·        Goldman CEO Tackles Critics, Touchy Issues—Susanne Craig

·        Too Big For Its Own Good by David Stires



Session 12



Part I – Michael Price, former CEO Mutual Shares and legendary investor (Mr. Price  led the insurgency that forced Chase Bank to merge with Chemical Bank)


Part II-Course Wrap-up, Final Exam Review



Michael Price