Is Bruce Wasserstein's Health About To Become A Jobs-Sized Problem?
First Steve Jobs and now Bruce Wasserstein? The head of Apple has had his share of disclosure issues regarding his health, which recently culminated with an (accelerated) liver transplant. It appears the CEO of Lazard could be next up on the health rumor pole. According to Bloomberg, Wasserstein "is in a “serious”
condition after being hospitalized for an irregular heartbeat." The investment bank has added that it would "not be providing additional updates at this time."
“His condition is serious, but he is stable and
recovering,” Lazard said in the statement distributed through
Business Wire. Lazard spokeswoman Judi Mackey declined to
This is not the first time Bruce's health has been an issue of public debate. Several years ago, Peter Cohan wondered out loud if there is something more than meets the eye regarding the 60 year old's health status:
According to my source, a few weeks after the tragic death of his
beloved sister Wendy, from lymphoma, and just after delivering his
infamous report on Time Warner Inc. (NYSE: TWX), Bruce went into hiding
for some eight weeks. He has lost 50 pounds and is said to look like a
wobbly, 75-year-old. Bruce is 58 and has always been portly. He is
apparently now back at work at Lazard and is to give a speech today.
Subsequently Cohan followed up his investigation with the following:
Claims that Wasserstein's health is "fine" are at odds with reports
I've received since July 27. For instance, on August 11, a person who
has seen Wasserstein recently said, "He has a prior heart condition and
this may have been a recurrence. He looks like he lost 75 pounds and
his voice sounds different."
Another person mentioned that Wasserstein had received quadruple
bypass surgery prior to joining Lazard. On August 9th, without
prompting, a former Wasserstein Perella & Co. banker said, "I saw
Bruce Wasserstein two weeks ago and decided he must be sick because he
looks like s--t." One who met with him around the same time said that
Wasserstein, who did not look well, commented "it's just the pneumonia"
-- the same ailment from which he suffered in December 2005 as reported
in a January 15, 2006 New York Times
profile. (I've had pneumonia in the past and it didn't cause me to lose
weight.) In sum, at least five people who have seen him in recent weeks
have wondered about his health.
Cohan's subsequent analysis into health disclosure issues well over 3 years ago have become a recurring topic lately as much has been made recently over Apple's (lack of) disclosure regarding any health concerns that Steve Jobs may have had in the past, and which culminated with his liver transplant.
This leaves open the question of when an officer's health
deteriorates to the point where it ought to be disclosed to
shareholders. A recent case in point is the initial public offering of
Lazard competitor, Evercore Partners Inc. (NYSE: EVR), whose CEO Roger Altman had a heart transplant in 2002. However, the IPO prospectus,
which goes into some detail about the material adverse effect of losing
key executives, made no mention of Altman's heart operation. A director
of several public companies I spoke with dismissed concerns about not
disclosing Altman's heart transplant because it is a pre-existing
However, this director believes that if the CEO is out of the office
for a period of time for reasons other than business or vacation, e.g.,
due to a medical condition, then the absence must be disclosed. If this
director is right and Wasserstein was indeed out for eight weeks due to
a medical condition, then this director believes that Lazard's board
may have erred in not disclosing the absence.
Nevertheless, the legal ambiguity of CEO medical disclosure leads me
to a simpler law -- the one prohibiting securities fraud. To qualify as
securities fraud, a statement by a public company must be material,
false, and made with the intent to mislead. For instance, if the CEO of
a company was seriously ill and the company disclosed that the CEO was
fine, the company might be committing securities fraud.
Perhaps Bruce's condition is nothing material, on the other hand people rarely end up in the hospital in "serious" condition over an irregular heartbeat if they are in pristine health. As the average age of the executive class in America creeps ever higher, these kinds of considerations should be next on the agenda of the SEC requiring an in depth probing.
In the meantime, the Zero Hedge staff wishes Mr. Wasserstein a speedy recovery.