A profile of Frank N. Newman, chairman of Bankers Trust New York Corp., that appeared in Tuesday's editions contained a typographical error. Sixteen, not 126, bankers attended a White House coffee in 1996 that Newman, then deputy Treasury secretary, organized.
The Sun regrets the errors.
NEW YORK -- The Capitol Hill meeting on Washington, D.C.'s fiscal crisis was growing heated, and D.C. Del. Eleanor Holmes Norton turned to the deputy secretary of the Treasury. You are uptight, she said, using an expletive, "and unhelpful." Frank N. Newman calmly considered the comment. Uptight, "I accept," he said. "Unhelpful, I don't."
Newman, who left the Treasury in late 1995, has needed every bit of his off-beat equanimity as chairman and chief executive of Bankers Trust New York Corp., which has agreed to acquire Baltimore-based Alex. Brown Inc. for $1.7 billion.
When Newman took over Bankers Trust early last year, it was reeling from a series of lawsuits and a Securities and Exchange Commission investigation focusing on its trading in high-risk derivatives.
Financial analysts credit him with restoring calm and integrity to the business, though at a considerable cost: the termination of about 20 executives and the payment of roughly $100 million in fines and settlements.
The company's profits almost tripled in 1996 to more than $600 million.
For "Mr. Clean," who was brought in to reassure regulators and investors, the purchase of Alex. Brown makes considerable sense.
Insiders say Newman and the Bankers Trust board targeted Alex. Brown for its strong reputation in matters both financial and ethical. And by picking Bankers Trust from a host of other suitors, Alex. Brown helped put to rest any questions about the trustworthiness of Newman's new firm.
Business associates describe Newman as a quiet mild-mannered man, the very essence of a conservative banker. But longtime friends say that exterior disguises a secret showboat.
A Clinton Democrat, Newman wears a black beret at the office, and his prominent mustache, on a slim 5-foot-11 frame, makes him a standout among notoriously clean-shaven Wall Streeters.
"When I first met him, I thought he must be from San Francisco," says Raphael Soifer, an analyst and longtime friend. "He is very much an individualist."
Self-confident, too. Newman was born and raised in Quincy, Mass., the son of a newspaper reporter and a high school music teacher. He attended the Thayer Academy in a Boston suburb, where the high school senior wrote in his yearbook: "Why study history? I make it."
After graduating from Harvard with a degree in economics, Newman began his career in Boston as a manager of a consulting firm. After a stint at Citicorp, he moved to California in 1973 to join Wells Fargo. He became that bank's chief financial officer in 1980.
His biggest challenge came at BankAmerica, which he joined as CFO and vice chairman in 1986. "BankAmerica was on its back then," Soifer says. "There was a real question whether it was going to survive as an independent bank."
But Newman fought off takeover attempts, and BankAmerica is now one of the strongest financial institutions west of the Mississippi.
At Treasury, he took on dull-sounding but important projects such as revising interstate banking laws. And, during two-plus years in Washington, he met his second wife, Liz, an antiques dealer whom he married shortly before leaving for New York.
The only smudge on his record of integrity has come this year, as congressional investigators scrutinize his role in organizing a White House coffee he attended in 1996 with 126 bankers and U.S. Comptroller of the Currency Eugene Ludwig -- a role that Newman refuses to discuss.
Pub Date: 4/08/97