The Bahamas Owe Louis Bacon A Serious Apology

turns out that even alleged suborners of murder and KKK officials have rights in The Bahamas.
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By UpstateNYer (Own work) [CC BY-SA 3.0], via Wikimedia Commons

By UpstateNYer (Own work) [CC BY-SA 3.0], via Wikimedia Commons

There have been few more delightful stories out of hedge fund land in recent years than the dispute between Moore Capital Management founder Louis Bacon and his Bahamas neighbor, the flamboyant Canadian affordable fashion mogul Peter Nygard.

At issue: Whether Lyford Cay will remain a quiet little beach community, and who draws more water in the islands.

Basically, Bacon says Nygard is building a waterfront Gomorrah that is ruining the environment. Nygard counters that Bacon just wants his land. Bacon accuses Nygard of trying to have him killed. Nygard says it’s actually Bacon who’s trying to have him killed, in fantastically creative ways, and oh yea did you know that Bacon is secretly the Grand Wizard of the Ku Klux Klan and is trying to overthrow the government of the Bahamas, throw Queen Elizabeth II off the throne and rename the whole archipelago Baconia? Bacon says the Bahamian government is letting Nygard hold dolphin-strangling parties because the island’s politicians are in his pay.

Those politicians responded by reading out some of Bacon’s letters on the floor of parliament, hiding behind parliamentary privilege to avoid violating Bahamian privacy laws. This is a step too far for the Bahamian Supreme Court, for the Bahamas is not only a beachy playground for the rich and not-so-rich alike, but also a major tax haven, the status of which would be very much undermined should aggrieved politicians be suddenly allowed to blab everyone’s secrets on the floor of Parliament.

And this pleases Bacon’s lawyer, Fred Smith, a great deal.

Emails between the Save the Bays foundation, a not-for-profit group Mr Bacon co-founded in 2013, and his brother Zachary were disclosed in a parliamentary debate in March. That violated both parties’ rights, according to Save the Bay’s attorney Fred Smith, and undermined the privacy that has long been the basis of the islands’ allure for the financial services industry.

The Bahamian Supreme Court ruled last week that its government could not rely on the shield of parliamentary privilege, and that reading private emails constituted a breach of privacy.…

“It’s the simple fact of having our privacy raped by the members of government,” he said. “Whatever the emails contain, whatever our private financial information with our banks may be, it is absolutely no business of the government to take it and launder it in public.”

Moore Capital founder wins Bahamian privacy case [FT]

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Louis Bacon Recruits Brother To Have Tough Conversations With Employees Re: The Fact That They No Longer Work At The Firm

One thing you may or may not know about hedge fund manager Louis Bacon is that he likes to keep his human interactions to a minimum. It's not a personal thing, just people in general thing. He doesn't like 'em and he doesn't want to talk to or look at 'em. For example, rather than taking five minutes to tell a subordinate he disagrees with a trade idea, Bacon has been known instead to "retreat to his office and place an opposing trade, a tactic known as 'fading' a colleague." Clients are treated similarly ("During meetings with...investors, Bacon, who often draws the blinds in his private office, frequently turns to his lieutenants to answer questions, often sitting silently through presentations") and if you thought that being, say the fruit of his loins meant special treatment, you were sorely mistaken ("One longtime assistant negotiates annual spending allowances with the elder of his children individually...Once they've agreed on the number, the assistant invites the child for a sit-down meeting with his or her father, during which Bacon usually signs off on the terms"). So it probably did not come as much of a surprise when LB hired his brother, the improbably named Zack Hampton Bacon III, to speak with a dozen or so members of the staff re: security waiting to escort them out of the building. Moore Capital Management LLC, the $15 billion hedge fund run by Louis Moore Bacon, cut 10 to 15 investment jobs as it restructures one of its equity teams, according to three people with knowledge of the matter. The portfolio managers and research analysts were let go on Sept. 11, said one of the people, who asked not to be identified because the information is private. Patrick Clifford, a spokesman for New York-based Moore, declined to comment. “Apart from a few hedge funds, it’s not that typical to see a large reduction in headcount in the industry,” said Ronen Schwartzman, founder of Ten Capital Advisors LLC, a New York- based firm that advises clients on investing in hedge funds. “Performance must be having an impact.” Bacon, 56, hired his older brother, Zack Hampton Bacon III, in February to oversee strategic planning, a person briefed on the matter said that month. Bacon told clients last month that he planned to return $2 billion, or about 25 percent of his main fund, to investors, saying it may be too big for him to generate returns in line with historic profits as “liquidity and opportunities have become more constrained.” On the bright side, no one was "sprayed in the face" with lead pellets, so not all bad. Moore Said to Reduce Positions Amid Equity Restructuring [Bloomberg] Related: Louis Bacon Has Better Things To Do Than Explain How Big An Idiot You Are