CHICAGO - Bank One: Merger Caused Bookkeeping Woes

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Title: Bank One: Merger Caused Bookkeeping Woes

Story Filed: Friday, April 21, 2000 12:59 PM EST

CHICAGO (Reuters) - Bank One Corp. said on Friday it had some bookkeeping problems in 1999 as it integrated the computer systems of the capital markets operations of the two banks that merged to form Bank One, the nation's fourth largest bank holding company.

Bank One said the problems would have ``minuscule'' impact on its financial results.

The bank would not comment on a report in Friday's Wall Street Journal that the problems have prompted an investigation by the regulatory arm of the National Association of Securities Dealers into potential violations that could result in fines of more than $1 million.

A source familiar with the investigation confirmed its existence Friday, but would not comment further.

The computer systems problems occurred when Bank One tried to integrate Banc One Capital Markets Inc. and First Chicago Capital Markets Inc. following the 1998 merger that formed Bank One.

In a statement, Bank One would not say if there was an investigation, citing company policy not to discuss regulatory matters. A spokesman for the NASD could not be reached Friday, a U.S. market holiday.

``There was no impact on customers, their security positions or their account statements,'' Bank One said in a statement. ''At year end, our books and records conformed to industry standards. The financial impact on the company will be minuscule.''

News of the investigation comes as new Bank One chief executive James Dimon tries to reform the bank's credibility with investors and analysts after problems at Bank One's credit card unit caused the company to repeatedly lower earnings guidance.

The newspaper reported that NASD is investigating areas such as account reconciliation and booking problems, security lapses and the filing of potentially misleading internal accounting reports with regulators.

Citing unnamed sources, it said disciplinary action is expected and could include fines, possibly totaling more than $1 million, against the bank and individual officers.

Bank One said on Thursday that Robert Rosholt will resign as chief financial officer, making him the first officer to leave since Dimon was named chairman and chief executive officer last month.

Bank One shares closed up 11/16 at 31-7/16. Copyright ) 2000 Reuters Limited. http://library.northernlight.com/HA20000421820000016.html?cb=0&dx=2006&sc=0#doc

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-- (Dee360Degree@aol.com), April 21, 2000


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