We are torn.
1. The guy is 76.
2. The guy ran like a preschoolers nose in February.
Arthur Nadel, 76, was being held on Tuesday in a Federal Bureau of Prisons center in Oklahoma City, Oklahoma, after being taken from a Florida county jail on Friday, according to county and prison records. Last week a U.S. magistrate judge in Florida ordered Nadel held without bail as a flight risk and sent to New York. Nadel was charged in New York because he traded through a brokerage in the city.
“We are planning to seek a review of the detention order in New York,” said Nadel’s lawyer, Todd Foster.
Jailed U.S. fund manager Nadel to seek bail [Reuters]
Say what you will about Marc Dreier, yes, ok, so he was into that whole “Yale thing,” but he sure know how to pick victims. The list of his stingees has grown to include Amaranth Group Inc., Perella Weinberg Partners and Blackstone Group LP’s GSO Capital Partners. Given the current environment, prosecutors are going to have to prepare themselves to defeat the dreaded Robin Hood defense.
Government lawyers identified the firms in a court filing in New York on Feb. 9 as three of the 20 institutions they claim are victims of Dreier’s thefts. Prosecutors didn’t disclose how much it alleges each of the companies lost.
Is it possible that all these losses never came to light before because these big name hedge funds failed to report the crimes? It seems awfully unusual that Dreier could have defrauded all these funds without tipping a few of them off before now. (Amaranth? That was so 2006).
Amaranth, Perella Were Victims of Dreier’s Fraud, U.S. Says [Bloomberg]
In years past, if you won every single hand at the Blackjack table for awhile, it wouldn’t be long before you found yourself in a basement room with Robert DeNiro and a ball-peen hammer. Hedge fund clients ain’t no Robert DeNiro.
Grieve, who managed Finvest Asset Management LLC and Finvest Fund Management LLC, created two “sham” firms that purportedly vouched for accounting and profits, the Securities and Exchange Commission said today in a complaint at federal court in Manhattan. He raised more than $11 million from U.S. clients since 2004, and began soliciting Europeans last year with “newly fabricated, fraudulent documents,” the SEC said.
“He represented to potential investors that he had 54 consecutive months of positive returns, which we found to be highly suspicious” and determined to be false, Scott Friestad, an SEC attorney overseeing its lawsuit, said in an interview.
I feel sorry for the fund that actually has a statistically improbable, but legitimate, record since this is going to be the new “smell test” for awhile.
Alright, let’s do this thing.
Franky-boy: “The purposes of this hearing is to formulate what we’ll be doing going forward.” Hopefully all based on the ideas put forth by Maxine Waters.
“There’s anger.”
“There’s confusion.”
There’s magic in the night.
“You, gentlemen, are the recipients of collateral benefit.”
Barney-boy says we can do this the easy way or the hard way: “I urge you strongly to cooperate with us.”
The Rep. from Alabama, who sounds like he’s going to start crying, is hoping God’s gonna pull us out of this; also, he “doesn’t want to hear any name calling,” which we take issue with, knowing that Blankfein has some choice ones for his colleagues.
Rep. Paul Kanjorski: WHERE’S THE MONEY, Lebowski Pandit, Lewis, Blankfein, Mack, guys whose names I can’t recall.
CHARLIE GASPARINO WAS RIGHT! Rep. Jeb Hensarling: “Over the course of this hearing, you will be castigated, publicly pilloried,” and rectally examined.
Rep. Judy Biggert and her constituents are angry.
Rep. David Scott wants to hear that the “$18 billion that went out to you was an abberation.”
Because he’s a sick fuck, Rep. Randy Neugebauer introduces another acronym. “I’m gonna call you TSEs (Taxpayer Supported Entities).”
Barney-boy says we’re gonna do this alphabetically, and supposedly not in order of least to most hair (right).
Reading of the remarks.
Blankfein: “We pay our bonuses based on three factors: “performance of the firm/business unit/individual.”
“Goldman Sachs has never had Golden Parachutes.”
“We look forward to paying back the TARP so we can be free of the burden of your bullshit rules.”
Boy-toy CEO Jamie Dimon is reading his remarks, no surprises here, but we did appreciate the death stare he gave Frank for interrupting him.
“Everyone here bears some measure of responsibility,” though obviously JPMorgan bears less than others, [nods in Citi's general direction, which elicits a mouthed "hey" from Vikula].
Bank of New York Mellon is a “bank for banks.”
Robert Kelly: “We essentially had a gun put to our heads.”
Kelly [voice cracking]: “We have not used any of the funds to pay bonuses.”
“We’ll repay it,” and then some.
Ken Lewis would like to start by making two key points. 1. That John Thain can S a fucking D. and 2. See point #1.
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Picking up the right hedge fund manager is a challenge, and you better be really committed because “stand by your man” doesn’t mean what it used to:
The Acting United States Attorney for the Southern District of New York, announced that Debra Ryan pleaded guilty today in White Plains federal court to a one-count Information charging her with aiding and abetting Samuel Israel, III’s failure to surrender to serve a 20-year sentence. As stated by Ryan during her plea and by the Government at various proceedings in the case:
Ryan knew that Israel was required to begin serving his sentence on June 9, 2008, and helped Israel avoid surrendering to begin serving his sentence. On the night before Israel was supposed to go to prison, Ryan, in her car, followed Israel, who was driving an RV, to a highway rest area. Israel parked the RV at the rest area and Ryan drove them back to the house that they shared. Israel subsequently picked up the RV from the rest stop and used it to avoid surrendering to serve his sentence.
Part of it apparently means driving the getaway-RV. Bet that wasn’t in the personals ad.
Hedge Fund Swindler’s Girlfriend Pleads Guilty To Assisting Flight To Avoid Prison [LawFuel]
Pretty sure even he’s bored of this topic by now, but, for the purposes of appearances, Attorney General Andrew Cuomo (seen here in this year’s school photo), is still rattling his sabre in the general direction of Merrill and its bonuses. Still at issue is the matter of MER paying employees earlier than usual, before Ken Lewis et al could take a whack at them, and now, an intern at the AG’s office has uncovered this:
Merrill Lynch paid out bonuses of more than $1 million to 696 people last year.
Cuomo Cites Big Bonuses At Merrill [NYT]
The prepared testimonies of Lloyd Blankfein, Jamie Dimon, Ken Lewis, Ronald Logue, John Mack, Vikram Pandit, and John Stumpf. And after the jump, a preview of the special treat Blankfein and Pandit have planned for intermission.
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Lots of Barclettes envying the position of the dearly departed Bella right about now. Second year BarCap capital markets analysts: $6,000-$8000. Derivative operations: zero.
CEOs To Sit For Congress Today (Reuters)
Today, if and when you’re watching CSPAN/CNBC, you’re going to be privy to the worst of America: petty for the sake of populism. I think we can expect the top questions to revolve around: conferences, office redecoration, and the all mighty bonus. So sayeth Lewis:
“”Taxpayers want us to manage our expenses carefully, and provide transparency about how we are putting their money to work to restart the economy,” Bank of America Corp CEO Kenneth Lewis says in his prepared remarks. “These expectations are appropriate and we are working to meet them.”
Toward that end, Lewis says, he and other top bank managers went without bonuses for 2008, while less-senior executives had their 2008 incentive payments cut by an average of 80 percent.”
Credit Suisse 4Q Loss: $5.2B (NYT)
Credit Suisse had a marginally better quarter than their we’re-not-giving-up counterpart UBS at down $5.2B, saying it was related to “poor trading and restructuring charges.”
“Shares in Credit Suisse were down 5.5 percent at 29.14 francs at 0831 GMT, while UBS shares, which gained strongly on Tuesday, rose 0.2 percent to 13.64 francs, compared with a 1.7 percent weaker DJ Stoxx European banking index.”
Nadel Seeks Bail In New York (FINalternatives)
Former Florida fugitive Nadel will seek bail in New York on charges related to his (allegedly) defrauding investors and after playing hide-and-seek for a couple of weeks with authorities. The Florida judge seems to be drawing a distinction here between Madoff and Nadel, as one peacefully turned himself in and the other did his best Harrison Ford:
“U.S. District Judge Mark Pizzo in Tampa, Fla., rejected Nadel’s bid for freedom earlier this month, noting that he was unable to put up a significant bond and that “there is a quantifiable risk and simple house arrest with electronic monitoring doesn’t resolve the matter.”
There Seems To Be A Problem With Consensus (Reuters)
There’s standing debate over whether Geithner actually said anything at all yesterday, and this seems to further the idea that if he did: no one understood it. Simply put, at the Times we see the headline: Bailout Plan: $2.5 Trillion and a Strong U.S. Hand, while at Reuters (above) we see: U.S. offers $2 trillion bank plan but stocks slump. And then there’s this.
You decide.
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$$$ Hedge-Fund Managers Help Raise $1.7 Million at backyard BBQ [Bloomberg]
$$$ Birthday Boy! [Cityfile]
$$$ Mark Cuban‘s Plan To Fix The Economy With His Money [SAI]
$$$ DJ Dick Parsons [Page Six]
