IDD Daily Updates and Restructuring Alert Weekly Updates, our email alerts
Street Recruiter Whitney Group Shuts Down
The recruiting firm accuses its former CFO of advancing millions of dollars without permission to executive tracking firm Hunt-Scanlon over a four-year period.
October 3, 2008
Global recruiting firm to the financial services industry Whitney Group is closing its doors after two decades in business, blaming former chief financial executive, Jeffrey Sussman, for its sudden demise.
The firm is suing Sussman for alleged fraud.
“It's really horrible and sad,” Gary Goldstein, Whitney Group's chief executive, told IDD.
Whitney Group filed the complaint with the Supreme Court of the State of New York, and is being represented by attorney Harry Lipman of Rottenberg Lipman Rich.
The recruiting firm accuses its former CFO of advancing millions of dollars without permission to executive tracking firm Hunt-Scanlon over a four-year period. Whitney filed a second lawsuit - this one against Hunt-Scanlon claiming it owes the recruiting firm $7 million from those wirings.
"Sussman failed to disclose and actively concealed his misappropriations from Whitney Group until, as the company became starved for cash in August 2008, he had no choice but to confess..." the filing said.
Whitney has become insolvent and unable to meet its payroll obligations. As a result, the company expects to “wind up” its affairs under New York’s debtor and creditor law, the filing says. Some of its employees are already interviewing with competing recruiting firms. “We are talking to some of their people,” said one recruiter who declined to be named.
But with the alleged fraudulent behavior aside, Whitney has had its problems. Sources say for instance the firm was recently hired by investment bank Broadpoint to find technology bankers, but that Goldstein didn’t deliver.
The broken company has been hurt by the shrinking financial services industry amid the sea of job losses at many of its institutional clients. For example, it counts among its clients Credit Suisse and Merrill Lynch, the latter of which is expected to experience attrition as a result of the banks most recent combination with Bank of America.
“Whitney Group trained some of the best of financial services professionals out there,” the recruiter said. But according to the source they were not able to retain the talent and instead drove people away.
For more information on related topics, visit the following:
