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Bank One Tells Some Investors, Ignores Others on Web Call

Two recent meetings and a recorded message spur questions about the bank's openness with investors.

After making exemplary efforts to widely disclose details about its troubles of the past several months, Bank One (ONE) - Get Report now appears to be considerably more selective about who gets to hear what's going on at the Chicago-based institution.

The bank has apparently been sharing information only with small numbers of market professionals rather than with the wider investing public. Firms that do this are coming under fire from regulators who fear that the growing number of individual do-it-yourself investors are getting shut out of the loop.

The

Securities and Exchange Commission

is currently

proposing rules designed to crack down on companies that fail to share material information as broadly as possible. And Bank One, some investors say, recently failed to do this.

Two Meetings

On Monday, two senior executives from the bank -- acting CEO Verne Istock and finance chief Bob Rosholt -- held two private meetings in New York, the first with a small group of brokerage analysts, and the second with a klatch of fund managers.

Further, on March 2, the bank notified a hand-picked group of analysts and investors of a recorded message by Istock and Rosholt that could be listened to by phone, or by a March 3 Webcast accessible from the bank's Web site. Though accessible to the public, no press statement was released to inform members of the general public that the recorded message was available.

The bank declined to say why it didn't widely publicize the recorded message, or why it didn't open up the New York meetings.

On the message, Rosholt said that first-quarter earnings were going to fall below analysts' expectations, which helped push Bank One's stock down 3.1% on March 3 in heavier-than-average volume. By contrast, large banks' stocks rose 1.1% on the same day, based on the

KBW Bank Index

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.

Wouldn't It Be Nice

Jeff Miller, a manager on the Villanova, Pa.-based

Acadia Fund

, which is long Bank One options, thinks the bank should have publicized the recorded message more widely. He said it "would've been nice" to hear what was said during the New York meetings. "What they said may not be worth much, but you still want to be able to make that judgment," said Miller.

Mark Coker, president of

BestCalls.com

, a company that hosts conference calls, agrees. "If there was new information on the recorded message, it could potentially be material. And you couldn't listen to the call if you didn't know about it." (Coker's firm hasn't worked for Bank One.)

A Bank One spokesman said that the recorded message "reaffirmed what we said" during a Jan. 11 analyst meeting in New York that the public could listen to a conference call. The spokesman wasn't present at Monday's New York meetings, but one analyst who was at the earlier one says he learned nothing new. "I don't think there was any material aspect to what they said," said Joe Duwan, Midwestern banks analyst at

Keefe Bruyette & Woods

, a New York-based brokerage that has no investment banking relationship with Bank One. (Duwan rates the bank a hold.)

Different Approach

These two efforts to communicate developments at the bank stand in contrast to Bank One's previous news announcements, which were advertised with broadly distributed press releases and sometimes discussed on open-access conference calls. For example, the bank's first earnings warning on Aug. 24 was made in a press release. A conference call followed, and its second warning on Nov. 10 was noted in a press release as well as a recorded message by then-CEO John McCoy, which was advertised in the release.

Company meetings with analysts like the one conducted by Bank One on Monday are customary on Wall Street, but they may become less common now that the SEC, which declined to comment on Bank One's recent actions, has selective disclosure in its cross hairs. If company execs can't say anything material, "what value will these one-on-one meetings be?" asked Coker.