"We've got a friend in common, and his name is Jesus": Money Manager's Pitch When Scamming Mark Sanchez And Co

JC would probably not have been cool with this instance of name dropping.
By Ed Yourdon [CC BY-SA 2.0], via Wikimedia Commons

Photo: Ed Yourdon, via Wikimedia Commons

As many of you know, business, like so many other industries, is about relationships and trust. The person we decide to trust with our money should have a great track record, of course, but a lot of people also like the extra level of comfort that comes from having a friend or business associate in common, who can vouch for the guy or girl we've entrusted with our capital, whether it's a college roommate's father or brother-in-law's best man. Finding common ground among hobbies, pastimes, and passions also helps, and if you can credibly claim to have a shared love of collecting vintage monocles, you're often in. Take Ash Narayan, for example: once he realized Mark Sanchez and a bunch of other current and former athletes had a thing for Christianity, all it took was a (paraphrasing/wild guessing) "You love Jesus? I love Jesus too!" here and a (paraphrasing/wild guessing) "JC and me, we go way back; hoo-boy, I could tell you some stories" there and boom: $30 million to invest as he saw fit.

Sanchez, Jake Peavy and Roy Oswalt, were defrauded out of about $30 million, according to a recently unsealed U.S. Securities and Exchange Commission lawsuit in Dallas federal court. The athletes all used the same broker, Ash Narayan, formerly of RGT Capital Management. The adviser gained their trust through religion and their interest in charitable works, the SEC said. Narayan concealed multiple conflicts of interest from investors, the SEC said in its lawsuit against him. He directed the athletes’ cash to The Ticket Reserve Inc., which allows fans to reserve face-value tickets to sporting events where the teams have yet to be determined, the SEC said...All three athletes sought low-risk, conservative investment strategies, the SEC said. Narayan ignored their requests and instead invested in TTR even as the company’s financial conditions were in distress.

Ex-Jet QB Sanchez Among Athletes Cheated in Investment Fraud [Bloomberg]


Paulson and Co Investor Finds New And Interesting Way To Kick John Paulson When He's Down

As Paulson and Co employees, clients, and people named John Paulson do not need to be told, the past year and half has not been the most joyous of times for the hedge fund giant. After making billions shorting subprime mortgages, the firm ended 2011 down 55 percent, was down 16 percent through the first half of 2012, and as of July, saw assets under management decline 44.9 percent to $21 billion from $38.1 billion, due to a combination of unfortunate performance and redemptions by investors so angry at the fund that they've felt the need to repeatedly tell anyone who will listen that parting ways with P&C was among the best if not the best decision they've ever made. One investor that hasn't had to consider voicing its unhappiness to the press or even worry about losing money at all? The 92nd Street Y. Last November Paulson guaranteed that he would personally cover their losses, whatever they turned out to be, come year-end. And the generosity did not stop there: for this one investor only, Paulson offered his services pro-bono, waiving all fees. So while he probably didn't expect representatives of the Y to rent a skywriting plane to proclaim their love and appreciation for him over midtown, lobby the city of New York to get 92nd renamed Paulson Street, or have his face tattooed to their chests, he probably also figured they wouldn't turn around and hit him the mother of all slaps in the face. In this case the declaration that despite the highly favorable terms of their arrangement, any involvement with P&C still felt a tad too risky for everyone's comfort level. In the midst of the financial crisis, the 92nd Street Y came up with a sweetheart deal for its endowment: investments in funds run by the likes of John Paulson, Marc Lasry, and other hedge-fund luminaries that were fee-free and guaranteed against losses. The strategy performed well for several years, said people familiar with how it worked, as the Y benefited from risk-free investing in some of the fund industry’s most successful strategies. But, concerned about the impact of a catastrophe in which a money manager couldn’t repay losses and eager to construct a more diversified portfolio, the Y recently opted to redeem its hedge-fund investments, these people said, and rebuild its financial strategy from scratch. Paulson himself is worth $15 billion, so a catastrophe in which he couldn't repay the Y's losses would have to be a big one. And don't give him some line about how you're pulling out of all hedge fund investments and it's not personal. You could have let him have this. Despite Sweet Deal, 92nd Street Y Redeems Paulson Money [CNBC] Earlier: John Paulson: I’ll Get The Losses This Year, Next Year We Go Dutch?