Wednesday, May 11, 2005
As expected, TIAA-CREF CFO Elizabeth Monrad has stepped down temporarily from her position because of the Wells notice she received from the SEC about its current intention to file securities law charges against her related to the AIG-General Re reinsurance transaction (earlier post here). A Wells notice is the term for the notification provided by the SEC's Enforcement Division staff that it plans to recommend to the full Commission that a civil action be filed naming the person (or company) as a defendant for a violation of the federal securities laws. A press release issued on May 10 (here) states: "TIAA-CREF today said that Elizabeth A. Monrad, Executive Vice President and Chief Financial Officer, has requested, and has been granted, an unpaid leave of absence without day-to-day responsibility at the company." A third General Re executive involved in the transaction, John Houldsworth, who supervised Monrad and Richard Napier, has received a Wells notice (see Wall Street Journal story here). These are the three principal officers involved on General Re's side of the transaction.
Interestingly, neither General Re nor Berkshire Hathaway have made any public disclosure yet (as of 10:30 a.m. on May 11) about Houldsworth receiving the Wells notice, although Berkshire Hathaway's quarterly earnings statement and 10-Q both reference the notice given to Napier that he received on May 2. If prior practice is any indication, the SEC probably Wellsed [like any area of law, terms of art become verbs] the three recipients (and their counsel) at the same time, and it is unlikely that one received it well in advance of the others. Its puzzling to me why the disclosures by General Re have been so slow regarding the second executive to receive an identical Wells notice. Moreover, while Ms.Monrad has stepped down temporarily from her position at a private company, there is no word yet whether Napier or Houldsworth will also be put on leave by General Re. This one seems to be playing out in slow motion, with corporate disclosures following up on the press. (ph).