NEW YORK — One of the few minority-owned firms to crack the precincts of Wall Street was reeling Thursday following the death of its founder and chairman, Wardell Lazard.
Lazard, chairman of the investment bank W.R. Lazard & Co., was found dead Wednesday afternoon in a Pittsburgh hotel room, his naked body face-down on the bed, Pittsburgh police Sgt. Mark Ninehouser said. At his side was a tray containing a "white, powdery substance," and an empty vodka bottle was at the foot of the bed, Ninehouser said. Lazard was 44.
For the Record
Los Angeles Times Saturday May 14, 1994 Home Edition Business Part D Page 2 Column 6 Financial Desk 3 inches; 92 words Type of Material: Correction
W.R. Lazard--A story Friday about the death of Wall Street investment banker Wardell Lazard contained incorrect details about a pending investigation of his firm, W.R. Lazard & Co. The probe by the Manhattan district attorney's office centers on several transactions involving the New York state Job Development Authority in which the firm appeared to have received unusually large commissions for the type of work performed. In one transaction involving interest rate swaps, the firm received a commission of about $540,000, according to Gerald McKelvey, a spokesman for the district attorney's office. Officials of the firm declined to comment.
An autopsy was performed Thursday morning, but the cause of death will not be officially known until toxicology tests are completed. There was "no sign of trauma, no sign of heart disease or anything else that would cause death," the officer said.
"There was nothing to indicate it was suicide or homicide. We are tending to believe it was an accidental overdose," Ninehouser added.
A spokesman for the firm, Roy Bumstead, characterized the reaction there as "complete and total shock and surprise."
Few of his friends or associates apparently suspected that Lazard might have a drug or alcohol problem.
"There are people in this business who are associated with that, and he was not one of them," said an executive at a competing firm.
Wardell's death stunned the small community of African American financiers and could threaten W.R. Lazard, which specializes in municipal bond underwriting and pension fund management.
"He was a visionary in our industry--he did more with limited resources than anyone in Wall Street history," said Napoleon Brandford III, vice chairman of Grigsby & Brandford, a prominent minority-owned investment bank based in San Francisco.
"His ability to get major Wall Street firms to invest (in his business) became a model for others after him."
Lazard launched the firm in 1985 with a $250,000 loan from Salomon Bros., and he quickly profited by underwriting bonds for cities. Many big cities had taken steps to increase the participation of minority-owned firms in city finance, and Wardell counted politicians ranging from former Washington Mayor Marion Barry to former New York City Mayor David Dinkins among his friends.
He quickly sought to turn the company into the nation's first full-service, minority-owned investment bank. But a string of acquisitions--financed in part with loans from now-defunct Drexel Burnham Lambert--proved to be too much too soon, and the firm was near bankruptcy in 1989 and 1990.
But the company recovered, in part by renegotiating the Drexel loans. It ranked as the largest minority-owned underwriter in the country in the first quarter of this year. Its money-management unit has $2.7 billion under management.
On Thursday, W.R. Lazard moved quickly to control the damage, naming Melvin Eubanks, vice chairman of one of the firm's key subsidiaries, acting chairman and chief executive. The company also outlined a strategy to refocus its businesses on a few core markets, a plan that was in place before Lazard's death, according to a spokesman.
Brandford and several other Wall Street sources who asked not to be identified said they believe the firm will survive. In addition to Eubanks, two other senior executives, Kenneth Glover and Thomas Mead, are highly regarded in the underwriting world.
Still, Lazard was clearly the visionary and chief salesman of the company, and the circumstances of his death could shake confidence in the firm--an all-important commodity in the fickle world of money management.
If it turns out that Lazard's death was indeed drug-related, it would put pressure on the firm to show that it is a reputable enterprise, said one Wall Street executive who asked not to be identified.
W.R. Lazard still has some financial troubles stemming from the Drexel loans, and it is facing an investigation by the U.S. attorney's office over whether it received contracts from a New York state agency in exchange for political contributions.
But the U.S. attorney's office in Manhattan said Lazard himself was not a target of the probe.