Finance, Accounting and Control Case Study

CSFB: Road to Recovery

OR

Abstract:
Credit Suisse First Boston (CSFB) is a leading global investment bank range of services to its customers across the globe. Under Allen Wheat as its CEO, CSFB underwent criminal investigations for certain Initial Public Offering allocations it made between April 1999 and June 2000. The bank was also under scrutiny by stock market regulators in several countries like Sweden, Japan and India. In 1999, when Russia defaulted on its debt, CSFB's business was severely affected due to its Russian market exposure. The company was overburdened with huge pay packages and guaranteed fixed cash compensations that it had promised to its executives. Amidst such troubles, in July 2001, John Mack joined as the CEO. He was given the arduous task of putting the company back on track. With Mack's continuous efforts, CSFB started showing signs of revival. The group strengthened its performance over the first half of 2003 and expected to achieve continued profitability. Under Mack's leadership, the company continues to build its position as a top-tier investment bank placing high priority on cost control and quality of service.

Pedagogical Objectives:

• To discuss the circumstances that led CSFB into troubles
• To discuss the strategies adopted by John Mack to put the company back on track.

Keywords : Credit Suisse First Boston, Finance Case Study, Credit Suisse Group, John Mack, Allen Wheat, Frank Quattrone, IPO allocation, Investment banking, Russian default, National Association of Securities Dealers, Securities Exchange Commission, Donaldson Lufkin and Jenrette, Turnaround, Cost cutting, Technology bankers, Hot IPO shares