With the threat of litigation against former board members of Bear Stearns, University President Henry Bienen needs to rethink his silence regarding his role at the investment bank.
Bienen announced last March that he would not be running for re-election to the board of Bear Stearns, five days prior to the announcement that it was going belly up and merging with JP Morgan. Given that Bear Stearns was first in the line of Wall Street dominoes to topple this summer, fallout for individuals at the top is bound to come at some point.
New York attorney Jacob Zamansky recently filed the first shareholder lawsuit against Bear Stearns. This particular lawsuit was directed at hedge fund managers, but Zamansky has indicated that future suits will likely include the board of directors. Bienen must be prepared to face up to the public scrutiny that comes with any big-name legal action.
Although Bienen's board membership at Bear Stearns didn't overlap with his role at NU, high-profile litigation with his name on it will reflect poorly upon the university, no matter what the university counsel's office might say to the contrary.
Aside from announcing to a Dow Jones Newswires reporter that he would not be running for re-election to the board, Bienen has refused to issue any other statements regarding his role in the workings of the investment bank.
Bienen needs to start answering questions about Bear Stearns, including the reason for his serendipitous timing in jumping ship. Not only does he owe the NU community an explanation, getting ahead of speculation will help protect Northwestern's name.
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