Archive for September 2006

  • 27 Sep 2006 at 1:48 PM
  • Argent

Hedge Fund Manager Reportedly Married His Daughter

bruce_mcmahan.jpgWhen we last heard of Bruce McMahan, the president and CEO of the Argent funds, he was buying a watch that once belonged to Horatio Alger. Just another story of a hedge fund guy buying collectible art and artifacts. Kind of boring.
It turns out that there was a bit more to McMahan. Or less. McMahan married his 35-year-old daugher in 2004, according to a report in the Broward-Palm Beach New Times. The report says the fund manager initially seduced his daughter while showing her a video of Braveheart.

For more than a year, attorneys have been kept busy in Miami, New York, Mississippi, and San Diego with the fallout over the breakup of McMahan and Linda in five lawsuits involving not only father and daughter but also their legal spouses, as well as Linda’s current boyfriend and soon-to-be father of her child. Details of McMahan and Linda’s extraordinary wedding at Westminster Abbey and their years as lovers come from court documents as well as Linda’s videotaped deposition, which New Times has made available on its website,
In court papers, McMahan denies that he ever had a sexual affair with his daughter. But he doesn’t explain how his and Linda’s DNA turned up on a vibrator that Linda’s husband uncovered in her luggage. McMahan also hints that Linda may not be his biological daughter, despite a DNA test he paid for showing with 99.7 percent probability that he is her father.

Ugh. More details are available in the full New Times story. Lots more. Disgusting details. Including court documents, wedding photos and videos. Too disgusting for us to summarize this early in the day. The media news and gossip website Gawker, however, picked up on one too-bizzare-to-be-true-but-true-nonetheless detail:

When Ewell made allegations in her divorce that McMahan had treated her cruelly, McMahan countersued and accused Ewell of engaging in affairs and “attempting to seduce mutual friends and associates,” according to an appellate opinion in the case. Ewell tells New Times that one of those men was billionaire Jeffrey Epstein, who has been much in the news lately for allegedly hiring underaged women to strip topless and massage him at his Palm Beach mansion. At the time, in the early 1980s, McMahan and Epstein worked together at Bear Stearns in New York. Epstein didn’t return a request for comment.
jeffreyepstein1.jpg“Jeffrey Epstein worked with [McMahan]. He was, let’s just say, in the divorce proceedings,” she says. “I was asked to stop by Jeffrey’s apartment to pick up some papers for Bruce. It didn’t feel right, so I didn’t even go in. I stood outside the door. And then, later, Jeff said I propositioned him. There were always allegations I was having to fight.

Emphasis obviously added. McMahan and Epstein worked together? Okay. We’ve got to ask. What the fuck were they putting in the water cooler at Bear Stearns?
The Argent funds manage around $3 billion in assets and operates our of offices in Connecticut (and four other US states), Bermuda, Dubai, Mumbai and London. Reports say the company has approximately 1,200 investors, mostly from outside the US.

Daddy’s Girl: Fisher Island millionaire Bruce McMahan loved his daughter so much, he married her
[Broward-Palm Beach New Times via Gawker]

  • 27 Sep 2006 at 1:09 PM
  • Oil

Another Reason to Be Long On Oil Futures?

Donna_Rice_and_Gary_Hart.jpgOPEC is already grumbling about the decline of oil prices, and may schedule a special meeting in advance of its regular meeting in December. There are some who think that the meeting won’t be until the end of Ramadan on October 24th. But we haven’t seen much evidence that the Islamic holy days preclude having business meetings.
What’s more, former Democratic presidential candidate is predicting that the US will attack Iran before the midterm elections in November. Oddly enough, Ramadan probably will delay this attack until late October or early November. The Bush administration is actually very respectful of the religious sensitivities of the world’s Muslims.
October Surprise [Huffington Post]

This Morning In Hewlett Packard: More Subpoenas Issued

Lawmakers issued five more subpoenas in connection with an upcoming hearing on Hewlett-Packard’s leak investigation, the Wall Street Journal is reporting. Yesterday, the U.S. House Energy and Commerce Committee issued two subpoenas to Hewlett Packard employees and one to a private investigator with the firm contracted to conduct the H-P prove. In addition, H-P CEO Mark Hurd, former chairwoman Patricia Dunn and outside counsel Larry Sonsini have been asked to testify before the committee.
The hearings are set to begin tomorrow. Looming question: who will take the Fifth Amendment and refuse to testify? Current odds say no Fifth Amendment moves from Hurd, Dunn or Sonsini. But its a distinct possibility for some of the investigators who may have directly engaged in pretexting.
House Issues More Subpoenas In H-P Leak-Probe Case [Hewlett-Packard]

  • 27 Sep 2006 at 12:19 PM
  • Amaranth

The End of the Amaranth Affair?

amaranthHQ.jpgAmaranth is contemplating liquidating its remaining assets or selling itself to a larger financial institution, according to a report in the Financial Times. In addition, the FT says Amaranth plans to let investors cash out regardless of various lock-up agreements.
Earlier Amaranth founder Nick Maounis had said that the fund plans said to stay in business. CNBC’s Charlie Gasparino is reporting that he has heard the change of heart of Amaranth came after the fund met with major investors, including big Wall Street financial institutions. The investors were apparently not happy with the possibility of having to stick with the fund, raising the possibility of lawsuits against Amaranth.
It looks like the final chapter in the Amaranth affair is just about to be written.
Amaranth outlines its liquidation plans [Financial Times on MSNBC]

  • 27 Sep 2006 at 11:46 AM
  • admin

Reader Survey Hotness

hollyvalance.jpgYou know you want it. You’re sitting around watching the emails pour into your mailbox, listening to the guys at CNBC blather on about the Dow trading near a record high and looking for online games to play.
We’ve got a much better way to procrastinate. Tell DealBreaker how hot you are by filling out our reader survey. All the links in this post point to it, so you cannot go wrong.
[Editor’s note: The picture to the left of Prison Break’s Holly Valance represents, uhm, something to do with the survey. Who really cares?]

The Wall Street Journal’s report is a bit ambiguous when it comes to the legal status of Kobi Alexander’s possible extradition to the US from Namibia. It claims that “the Namibia government enacted a law to establish an extradition treaty with the U.S.” But, of course, there is no extradition treaty between Namibia and the U.S. and the government of Namibia cannot exactly just pass legislation creating one. There’s this troublesome thing called the U.S. Constitution which sets forth the requirements for enacting a treaty, including things like Senate approval. And, just to be clear, the Senate hasn’t approved any such treaty with Namibia.
So what’s going on? DealBreaker turned to our favorite extradition expert, Douglas McNabb of McNabb Associates for an explanation.
“There is no extradition treaty between the two countries. However, any country can expel anyone they want. If he’s in the country illegally, they can deport him to the US. If he’s there with a visa, they can revoke his visa,” McNabb said. “From this report, it seems that they have passed special legislation—a unilateral extradition statute—that allows for the extradition of someone the US wants,”
McNabb told DealBreaker that similar legislation has been passed in the UK. The US has an extradition treaty with the UK, but the parliament has also unilaterally passed legislation reducing the burden of proof required for extradition from probable cause to a simple presentation of charges against the accused. McNabb served as an expert witness in the NatWest Three extradition case.
McNabb also noted that Costa Rica—which also has a treaty with the US—often doesn’t bother to go through a formal extradition process. “In Costa Rica they just revoke your visa. It becomes an immigration issue rather than an extradition issue. At that point, you are in the country illegally and so they take you to the airport, where US Marshalls are waiting,” McNabb said.
There aren’t many place where a fugitive can hide from US law enforcement, according to McNabb. “In the first place, most places that don’t have a treaty with the US aren’t places you would want to be. Second, as this case shows, just because there isn’t an extradition treaty, doesn’t mean that the US won’t get you,” McNabb said.
International Extradition [McNabb Associates]

Where In The World Is Kobi Alexander: Namibia, That’s Where.

kobialexander1.jpgIt looks like one of our favorite games—Where In the World Is Kobi Alexander—is finally coming to an end. He’s been arrested in Namibia, according to the Wall Street Journal, where he is being held pending extradition to the US.
You remember Kobi, right? He’s Comverse founder who was charged by the U.S. Attorney’s office in Brooklyn with fraud charges stemming from backdating allegations. When he failed to show up for court the FBI declared him a fugitive. He later allegedly turned up in Sri Lanka—which is not, as we explained, a very good place to hide from the long arm of American law.
Namibia wasn’t such a bad choice for Alexander. When he fled there, Namibia didn’t have an extradition treaty with the U.S. But according to the Journal, after US authorities located Kobi there by tracking bank transactions “the Namibia government enacted a law to establish an extradition treaty with the US.”
So Kobi got his very own extradition law. Wonder whether they’ll call it “Kobi’s Law.”

Fugitive Alexander Is Located in Namibia
[Wall Street Journal]

Hewlett-Packard Sympathy Watch: Day 3

Some of it is no doubt H-P counterspin but some of it strikes us as genuine concern that the criticisms of Hewlett-Packard have gone too far. Recall that yesterday the big debate was whether the debacle was mostly Pattie Dunn’s fault, mostly George Keyworth’s fault or arose from a widespread problem at the company.
Today Gary Weiss tentatively joins the “maybe we’ve gone too far” camp, citiing the “piñata principle.”

I think that the “piñata principle” applies here. That is, once the criticism of a company or executive reaches a tipping point, he is officially a “piñata” and will remain such until an effective counter-spin campaign commences.
During his pay controversy, Grasso was tranformed from “capitalist icon” into “grasping and overpaid bald man” and roughly the same thing has happened to the H-P dustup, which moved quickly from “big nothing” into a chairperson-displacing earthquake.

It’s a trend. Patricia Dunn is Martha Stewart! All of H-P is Dick Grasso!
Is the media overreacting on H-P? []