By Joseph A. Giannone
NEW YORK (Reuters) - Relational Investors LLC, the activist investment firm fighting to win seats on the board of Sovereign Bancorp (SOV.N: Quote, Profile, Research, Stock Buzz), has hired former U.S. Securities and Exchange Commission Chairman Richard Breeden as an adviser, Relational principal Ralph Whitworth said on Thursday.
Whitworth, speaking at the Reuters Banking Summit, disclosed that his San Diego-based firm had hired Breeden, who was SEC chairman from 1989 to 1993.
The hire comes as Relational continues a protracted public campaign to secure two seats on the board of Philadelphia-based Sovereign and promote a number of governance reforms.
Relational, which owns about 8 percent of Sovereign's shares, for more than a year has decried a number of "unusual and questionable" dealings by directors and Chief Executive Jay Sidhu amid his campaign to rally shareholder support.
"I've asked Richard Breeden to advise me on Sovereign," Whitworth said at the Summit.
Relational Investors since October has spotlighted a number of unusual transactions. Whitworth claimed Sovereign directors received excessive pay and loans from the bank.
The firm also claims Sovereign's board has a number of undisclosed conflicts of interest, such as paying up to $700,000 a year in rent to one director for commercial property used by the bank.
"We've notified the SEC about our concerns," Whitworth said, though he declined to say whether he has been contacted by SEC staff. Continued...
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