Cayne started work at Bear Stearns in 1969, having been spotted by a fellow bridge player and financier while he was playing bridge full-time. He became Bear Sterns president in 1985, CEO in 1993, and Chairman of the Board (while continuing as CEO) in 2001. In 2006 he became “the first Wall Street chief to own a company stake worth more than $1 billion”.
He had a reputation for being asleep at the wheel, regularly leaving the office by helicopter for 3 ½-day golf weekends or out of town at bridge tournaments. He was replaced as CEO only in 2008 and he was with the company until its demise.
Cayne is held responsible for betting the firm on risky home loans, and two of its highly leveraged hedge funds collapsed in mid-2007 (he was said to have been playing bridge at the time). Bear held nearly $40 billion in mortgage bonds that were essentially worthless. “I didn’t stop it. I didn’t rein in the leverage,” Cayne later told Fortune.
He lost most of that in the 2007–2008 collapse of Bear Stearns’ stock and sold his entire stake in the company for $61 million that held $40bn in mortgage bonds and ended up being sold to JP Morgan (for which they received govt assistance).