Deals & People June 10, 2010

Janney Adds Five to Fixed Income Group

Janney Montgomery Scott is further beefing up its fixed income team with the addition of five new hires, the company announced.
Reported by

The company said the new employees will work in municipal sales, taxable sales, and retail mortgage trading.

They are:

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  • Mike Festa, Director, Institutional Municipal Sales
  • Dan Lang, Institutional Municipal Sales
  • Brian Doherty, Institutional Taxable Sales
  • Wayne Wales, Institutional Taxable Sales
  • Dan Herbst, Retail Mortgage Trader

“These are game-changing hires who bring top expertise and a diverse network of relationships to our firm,” said Steve Genyk, Managing Director and Head of Fixed Income at Janney, in a news release.

Festa will serve as Director of Institutional Municipal Sales in Janney’s Boston office. With nearly 25 years of experience in municipal sales, Festa began his institutional career with Dean Witter, before working for Kemper Securities and Legg Mason. He joins Janney most recently from Keybank Capital Markets. Festa holds a BA in economics from Harvard University.                    

Lang brings nearly a decade of industry experience to Janney. Prior to joining the firm, he worked in institutional sales with Keybanc Capital Markets and Legg Mason Wood Walker. Lang graduated in 1999 from The College of the Holy Cross, in Worcester Massachusetts, with a BA in English and a minor in economics. He will be working in Janney’s Boston office.

Doherty joins Janney with nearly 15 years of industry experience. He previously served as the Vice President of Fixed Income Sales at three firms: Raymond James & Associates, Daiwa Securities America Inc., and Spear, Leeds, & Kellogg (subsidiary of Goldman Sachs). Doherty is a graduate of Cornell University and will be working in Janney’s Boston office.

Wales joins Janney from Stifel Nicolaus & Co. Inc., where he served as First Vice-President of Fixed Income Sales. He comes to Janney with nearly 25 years of experience trading and selling mortgage-backed securities. He holds a Bachelor of Arts degree from Villanova University and works in Janney’s Philadelphia headquarters.

Herbst joins Janney with over 12 years of retail fixed income experience and will serve as a Retail Mortgage Trader in the Firm’s Philadelphia office, where he will join the current retail trading team in the servicing the taxable fixed income needs of Janney’s Private Client Group. Most recently, he served as Senior MBS Trader at LPL Financial where he covered the largest independent adviser force in the country. Previously, he was at Edward Jones & Co. on its government trading desk. A graduate of Miami University of Ohio, Herbst holds his BS in finance.

Compliance June 10, 2010

Home Depot Cleared in Stock Drop Suit

A federal judge in Georgia has cleared Home Depot of wrongdoing in a stock drop lawsuit.
Reported by

U.S. District Judge Orinda D. Evans of the U.S. District Court for the Northern District of Georgia said Home Depot’s defined contribution plan was an eligible individual account pension investing in company stock so it was not covered by the diversification mandate in the Employee Retirement Income Security Act (ERISA). The company stock allegations were actually claims the plan should have been better diversified, Evans said.

Participants claimed it was no longer prudent to continue offering the company stock after the company’s share price fell 16% when Home Depot announced in 2006 its executives had been backdating stock options for 19 years. The participants also claimed the company misclassified nondefective merchandise for vendor credits.

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Evans said the court would not adopt a position the 3rd Circuit Court of Appeals took in 1995 when it held that fiduciaries of employer stock plans have a duty, in very limited situations, to halt investment in employer stock when the stock is no longer a prudent investment.

“A 16% decline in Home Depot stock is not dramatic enough to show that the prudent course of action would have been for the Investment Committee to disregard the Plan document to cease matching contributions in Home Depot stock and delete Home Depot stock from the list of available investment funds,” the court said.

The case is Lanfear v. Home Depot Inc., N.D. Ga., No. 1:07-CV-197ODE.

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