In the summer of 2007, CIT Group hosted a gala on the luxury liner Queen Mary 2 and hired American singer and actress Patti LuPone to perform. After the revelers left, CIT CEO Jeffrey Peek and his wife stayed on board for a cruise. After all, this was the life of a Wall Street CEO that Peek had coveted since being passed over at Merrill Lynch for the top job in 2002. Peek took the CEO position at CIT the next year, with ambitions to turn the sleepy middle-market lender into a major player.
Under Peek, CIT expanded rapidly but the credit crisis left the firm struggling to refinance. At the beginning of this month, the firm filed for Chapter 11 bankruptcy protection. In October, Peek announced he will step down at the end of the year, but it was too late to appease critics. "If CIT was the Titanic, the ship had already hit the iceberg and was taking on water rapidly," says Sean Egan, managing director of Haverford, Pennsylvaniabased Egan-Jones Ratings. "The job of any good CEO is to anticipate market conditions, and Peek failed to do that."