(Adds details on Burnell’s departure)
By David Henry
NEW YORK, June 12 (Reuters) - Mike Mayo, a prominent bank analyst who became unemployed in February when his brokerage shut down, has a new job at Wells Fargo & Co.
The San Francisco-based lender hired Mayo to make calls on large-cap bank stocks in its securities business, according to a statement released on Monday.
“Mike’s stature in the industry is well-recognized,” Diane Schumaker-Krieg, global head of research, economics and strategy at Wells Fargo Securities, said in a statement. “We are thrilled to have such an influential voice in this critical sector join our growing platform.”
Matthew Burnell, who had covered bank stocks at Wells Fargo for over a decade, is leaving, spokeswoman Jessica Ong said.
Mayo has garnered a reputation as a blunt critic of bad behavior in the industry who spots trouble early.
Since the early 1990s, he has made several savvy calls on stocks before banks - individually or as a sector - faced huge losses. His more famous downgrades happened ahead of the dot-com bubble bursting near the turn of the century, as well as the more recent subprime mortgage crisis.
Mayo has a tendency to ask pointed questions during conference calls and investor events, making himself a thorn in the side of top executives at Citigroup Inc and JPMorgan Chase & Co, among others.
He turned up at JPMorgan’s most recent investor day less than 24 hours after losing his job at brokerage CLSA, identifying himself as a “free agent.” He then asked Chief Executive Officer Jamie Dimon what Mayo called a “trick question” about the bank’s brand.
Dimon responded by telling an anecdote about Mayo having been banned from participating in analyst calls at another bank because management found him to be “insulting.” But, Dimon said, the problems Mayo highlighted were correct, and his criticism ultimately helped the bank improve.
“You are a brand, too, Mike Mayo,” said Dimon. “You didn’t need CLSA.”
Wells Fargo itself is in the midst of an overhaul after revelations emerged last year that thousands of employees had opened as many as 2.1 million accounts in customers’ names without their permission to hit aggressive sales targets. The sales abuses led to a $185 million fine, a CEO departure and weakness in its share price.
As an analyst working at Wells Fargo, Mayo will no longer be covering the bank. (Writing by Lauren Tara LaCapra; Editing by Jeffrey Benkoe)