Levy Leaving Lehman

Lehman Brothers' top telecom analyst, Steve Levy, is leaving his post after nearly 20 years in the business of analyzing telecom companies on Wall Street, Light Reading has confirmed. And, according to Light Reading sources, Levy's departure is more his employer's wish than his own.

In an email note to colleagues and clients, Levy wrote: "As of September 2, and after more than 19 years on Wall Street researching the communications technologies market, I am going to be officially taking some time off… Just as the telecommunications environment has proven itself to be cyclical in nature, my career is now entering a new phase of its own cycle. And even though I have not yet decided what my next career move is going to be, I feel fortunate to have many alternatives to pursue."

Sources say that between the lines of Levy's note, there's a subtle hint that Levy was asked to leave. To wit, Levy writes that he's got no idea what he'll do next, and he never explicitly states that he's retiring or pursuing other interests. The only thing he does say for sure is that he's leaving -- fast.

Some say it's just part of industry-wide research streamlining. It's not entirely surprising to Levy's peers in the analyst world. "This is a shoe that's been waiting to drop for a long time," says one Wall Street telecom analyst, who asked not to be named. "Lehman has been oversupplied on the communications analyst side for a while."

One hedge-fund source, asking not to be named, said Levy's departure comes as part of a larger trend of investment banks downshifting their research efforts. This trend was set in motion by the crackdown on ties between research and investment banking led by New York State Attorney General Eliot Spitzer. (See Wall Street Settles, SEC, NY Settle With the Banks, Salomon Slammed in Settlement, and Grubman Was Right!.)

Adding to the intrigue is the fact that Levy -- a frequent public speaker and someone often quoted by the press -- appears to be suddenly quashing all media inquiries.

When Light Reading requested an interview with Levy on Tuesday, Tracy Doka, a representative of Lehman's compliance department replied: "A lot of analysts here just unilaterally reject interviews, and Steve is one of those, so, unfortunately, he will not be granting any interviews."

Calls to Levy's office at Lehman Brothers weren't returned. But a source close to Levy's family, who asked not to be named, offered this: "Steve's not going to work anywhere for a few months, but afterwards, he's going to do some consulting, sit on some corporate boards, and just generally keep his options open."

Levy had been at Lehman Brothers since July 1998. Prior to that, he held top telecom research posts at Salomon Brothers, Oppenheimer & Co., and Hambrecht & Quist. He worked at {dirlink 5|11} (NYSE: T) for six years before beginning his career on Wall Street. In December 2004, Levy was a featured speaker at Light Reading's Telecom Investment Conference (see From MeBay to Quadruple Play).

Levy's become quite a telecom equipment bull in the past two years, but it wasn't always so (see Lehman Says Capex Trend Has Turned). He was one of the first sell-side analysts to go negative on {dirlink 2|94} (NYSE: LU) during the deflating of the bubble, and he later had many unkind words for Ciena Corp. (Nasdaq: CIEN). (See Lehman Evaluates Lucent and Ciena Hit on Lehman Note.) When Patricia Russo was named CEO of Lucent, Levy pointed out that she wasn't exactly the outsider that many folks were looking for to turn the company around (see Lucent Stands Pat). More recently, though, Levy has given Russo good reviews for her efforts (see Lucent's Revenue, Losses Shrink ) .

Whatever the circumstances of his departure, some point out that Levy was a fixture in the industry who'll be missed. "He's one of the class acts in the business," says CIBC World Markets analyst Stephen Kamman. "I'm certainly not happy to lose him. He has always added to the debate."— Phil Harvey, News Editor, Light Reading