Reverse spin/The week in Review

The Securities Industry Association, looking much like the cat that swallowed the emu, reported that 1999 pre-tax profits for the stock-and-bond biz were up by a third over ’98, from $12.2 billion to $16.3 billion. More than a third, $6.8 billion, came in the last quarter. The industry set records in research revenue, up 183% to $157 million; trading gains, up 85% to $36.4 billion; asset management fees, up 27% to $11.5 billion; commissions, up 21% to $29.3 billion; underwriting, up 10% to $16 billion; margin interest, also up 10% to $13.4 billion; and even mutual fund income, up 7% to $6.7 billion.

The news came as analysts were raising their first-quarter profit predictions for brokerages, thanks to record-level market activity. Early in was National Discount Brokers Group Inc., which announced that it expects record results for the quarter ended Feb. 29.

Ruble trouble

The Bank of New York must wish it had never heard of Russia. It’s bad enough that one of its execs and her husband pleaded guilty last month to helping launder 10 billion bucks through the bank, but now the disgraced exec’s former boss is suing the bank and three of its officers for $270 million on grounds that it ruined her reputation by suspending her.

The suit by Natasha Gurfinkel Kaligovsky, 45, who now lives in Britain, also alleges that because she is Russian, the bank tossed her to the wolves to distract attention from American wrong-doers. She may sue in the United States and Britain, too, she says. A bank spokesman sneered that the suit is merely a “nuisance and entirely without foundation.”

Old order passeth

John Reed, 61, co-chairman of Citigroup, will retire next month, leaving the field open for the other co-, Sanford I. Weill, 67 this month. Mr. Reed had been the Citicorp supremo; Mr. Weill the Travelers Group guru. No word on the future of former Treasury secretary and fly-fisherman Robert Rubin, the third member of the chairman’s office, but he nixed the top job.

Also retiring is Saul Steinberg, 60, as chief executive of insurer Reliance Group Holdings Corp., which his family controls. He had a mild stroke five years ago and recently sold an Old Master painting for $3 million and his Fifth Avenue apartment, once owned by John D. Rockefeller Jr., for $38 million.

Mr. Steinberg leaped into the news 30 years ago when he failed in a hostile takeover of what was then Chemical Banking Corp. He failed, too, as a raid warrior in several other bids through the ’80s (although making himself millions), as well as in getting Reliance out of debt — thanks to some unsuccessful acquisitions.

Reliance, by the way, also suspended dividends and sold its surety business to a Citigroup subsidiary for $580 million.

American pie

Reliastar Financial Group in Minneapolis is keeping to its early-American theme in acquisitions with the planned purchase of mutual fund company Lexington Global Asset Managers Inc. for $47.5 million. Its last buy, of course, was Pilgrim Capital Corp. in October. The two companies would manage $20 billion…The Clinton administration is urging a change in overtime law to allow companies to offer stock options to hourly workers…Goldman Sachs Group Inc. gave $1 million to the Jackie Robinson Foundation to help recruit minority talent to Wall Street…Index imam Vanguard Group is adding two actively managed funds. One involves the takeover of five-star rated Tip: Turner Growth Equity Fund of Berwyn, Pa., which manages $270 million; the other would be a new value fund to be managed by Grantham Mayo Van Otterloo & Co. LLC of Boston. A value fund? Is there a change in the weather?