NEW YORK (AP) – Bear Stearns Cos. Chief Executive James Cayne on Thursday denied regularly smoking marijuana, after a front-page Wall Street Journal article claimed he was frequently away from work playing golf and bridge, and sometimes smoked the drug on such outings.
Cayne sent an internal memo to employees Thursday morning saying he was dedicated to his work. He added “the article also alleges I engage in inappropriate conduct outside the firm. As I stated in the story, this is absolutely untrue.”
A spokeswoman for Journal parent Dow Jones said Thursday afternoon it stands by the story it reported. The article said Cayne was often unreachable while golfing at his country club in New Jersey. It also said he traveled to participate in bridge tournaments while two hedge funds managed by the firm worth billions of dollars lost all their value as credit markets tightened.
The article also claims Cayne “sometimes smoked marijuana at the end of the day during bridge tournaments” and “used pot in more private settings.”
Bear Stearns reported a 61 percent decline in year-over-year earnings for the quarter ending Aug. 31 because of rising delinquencies and defaults among subprime mortgages — home loans given to customers with poor credit history. But Cayne stood firm in the memo, a copy of which was obtained by The Associated Press.
“I stand by the record of success the firm has had over the 14 years that I have had the privilege of leading this great organization. I remain, as I have been for many years, intensely focused on our business,” Cayne said. “Thank you for your continued dedication to Bear Stearns, and don't be distracted by the noise. I am certainly not.”
Shares of Bear Stearns fell $4.18, or 3.7 percent, to $109.42 in afternoon trading, following heavy declines across the market.