"Reid Snellenbarger's Lazard firing raises a heap of questions"
It's rare that an investment bank pushes the ejector button quickly, but last week, Lazard managed to do an investigation, fire a managing director, and pump out an all-hands email signed by the incoming CEO announcing his defenestration between Friday evening and Sunday afternoon. Impressive.
What did he do wrong? To be clear, I have no personal knowledge of Reid Snellenbarger, or the incoming Lazard CEO, Peter Orszag who sent the email. Nor do I know what allegedly happened at the private party over the July 4 weekend, where Snellenbarger allegedly engaged in inappropriate touching among Lazard colleagues. But based on my own experience of working on Wall Street and being hired by various firms, I know that this kind of alleged behavior has become very unusual.
Twenty years ago, that wasn't the case. Pre-2000 and perhaps pre-2010, it was common for older male employees in finance to proposition female employees with varying degrees of seriousness and persistence. Christmas/holiday parties and summer outings with the interns at a beach/pool/lake or an after-softball-game beer bash could be a petri dish for bad behavior. Drinking, dancing, once-a-year imagined "opportunities", could all take flirtatious banter over the line. A lot of firms stopped holding parties as a result.
Times have changed. In 2023, it's incredibly hard to imagine why a senior banker, who just got a huge reputational promotion by moving from Houlihan Lokey to become head of restructuring at Lazard, with potentially a lot of restructuring business coming up in the next few years, would decide to take a risk by inappropriately touch someone among his colleagues at a party. If such an alleged event occurred, I would think that would take a lot of beers or gin and tonics.
This is not to absolve Snellenbarger. If the alleged event occurred, it was wrong. Snellenbarger's exit is also a timely reminder that Lazard has a new CEO in Peter Orszag who comes from a different sort of background. Orszag is more of a political economist, with previous big jobs in the Obama Administration and Congress, but only a short stint in investment banking at Citigroup prior to Lazard. That heritage may have inclined him to take a bigger stand against lechery.
It's also worth considering who was involved in the alleged incident involving Snellenbarger. Was it a colleague, an intern, or maybe an intern who was the daughter (or granddaughter) of a CEO or retired CEO who had been a big Lazard client? Would Lazard take similar action in all of these cases?
Whatever occurred, it may become clearer when Lazard completes the FINRA U5 form to discontinue Snellenbarger's employment. Firms completing U5s are given four reasons for an employee's termination: 'voluntary', 'permitted to resign', 'discharged' and 'other.' Unless voluntary is chosen, some explanation is usually required. For the moment, though, Snellenbarger remains registered with Lazard, even if he's not actually at his desk.
William Lawson is the pseudonym of a banker with a long pedigree on Wall Street.
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