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NASD probes Bank One
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April 21, 2000: 12:36 p.m. ET
Nation's fourth-largest bank confirms problems, but says customers unhurt
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NEW YORK (CNNfn) - Bank One Corp.'s investment banking unit is facing a National Association of Securities Dealers investigation into its systems-integration problems, according to a published report. The investigation follows the 1998 merger of the old Banc One Corp. and First Chicago NDB Corp. 
The Wall Street Journal reported Friday that the investigation by NASD Regulation, the association's regulatory arm, is looking into problems dealing with internal process problems, not the loss of clients' funds. But for a bank that is struggling to rebuild credibility with Wall Street, the investigation could prove to be an acute embarrassment, the paper said.
Chicago-based Banc One (ONE: Research, Estimates), the nation's fourth-largest bank, has gone through a management shake-up after a series of operation problems since the merger. In its letter to shareholders in its annual report, Verne Istock, who was then president and acting chief executive, wrote, "Simply put, we did not manage that business as vigilantly as we should have. So to right the course, we've taken significant action, involving senior management moves, organization realignments, and policy and operational changes."
One major change was the hiring of former Citigroup Inc. (C: Research, Estimates) executive Jamie Dimon as chairman and chief executive on March 27, with Istock retaining his job as president.
Thursday, the bank announced the resignation of Robert Rosholt as chief financial officer. Rosholt issued a statement saying, "It is the right time for a change for me and for the corporation."
Both predecessor banks concentrated on consumer and corporate banking, rather than investment banking activities. The investment banking operations are now combined in a unit called Banc One Capital Markets. 
The Journal report, which attributed unnamed sources, said NASD Regulation is focusing on account reconciliation and bookkeeping problems, supervisory lapses and possibly misleading internal audit reports. The paper said that NASD regulation refused to comment.
Bank One officials issued a brief statement saying they would not comment on regulatory matters. But the company admitted, "we had bookkeeping problems that resulted from systems conversion in the capital-markets units and their consolidation in 1999. There was no impact on customers, their security positions, or their account statements, and at year end our books and records conformed to industry standards."
"The financial impact on the company will be miniscule," the company said.
Shares of Bank One closed Thursday at 31-7/16, up 11/16. 
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Bank One
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