The Morning Brief: At SALT, Just a Touch of Scandal
There is no shortage of controversial figures, outspoken celebrities or outrageous characters scheduled to speak at Las Vegas’ SkyBridge Alternatives, or SALT, conference, whose panels get underway today.
They include former New York City Mayor Michael Bloomberg, who some people were hoping would run for president, Dallas Mavericks owner Mark Cuban, former Bill Clinton Administration honchos Robert Rubin and Lawrence Summers and Equity Group Investments founder Sam Zell, who years ago was dubbed the “Grave Dancer” for his shrewd distressed deal-making.
This year SALT has upped the ante. Among the star-studded line-up of speakers scheduled to participate this year are at least four who have run afoul of the law or the regulators — three of whom are in the financial industry.
Among them is Steven Rattner, chairman of New York-based Willett Advisors, which manages Michael Bloomberg’s assets. Many know Rattner these days for his charts about the economy on MSNBC’s “Morning Joe” or for his tenure as President Obama’s unofficial car czar during the financial crisis. Rattner was also once managing principal of investment firm Quadrangle Group and, before that, a rainmaking media investment banker at Lazard Freres.
In 2010, however, Rattner agreed to pay $6.2 million to settle charges by the Securities and Exchange Commission that he participated in a kickback scheme with the New York State pension fund. Under the deal, Rattner agreed to be banned from certain Wall Street-related activities for two years.
Separately, he also agreed to pay $10 million in restitution in a settlement with then-New York State attorney general Andrew Cuomo.
Then there’s Emanuel Friedman, cofounder of EJF Capital, who had been a founder and former co-chairman and co-chief executive of Friedman, Billings, Ramsey Group.
In 2006, Friedman, Billings, Ramsey, as well as Friedman and two other former executives, settled insider trading and other charges with the SEC over a private investment in public equity deal involving CompuDyne Corp.
Under the deal, Friedman agreed to pay $754,046 and to be barred from serving in a supervisory capacity with any broker or dealer for two years. Furthermore, the order mandated that Dreyer pay $19,870, while FBR was ordered to comply with certain remedial endeavors. Friedman was also separately fined $500,000 by the National Association of Securities Dealers.
Meanwhile, in March Leon Cooperman and his New York hedge fund firm, Omega Advisors, received a Wells Notice from the SEC related to an investigation into Omega’s trading in Atlas Pipeline Partners, which occurred in July 2010. The notice suggests that Cooperman and Omega may be charged civilly, but so far nothing has come down.
One non-financial speaker also has had legal difficulties. General David H. Petraeus, a former head of the Central Intelligence Agency and commander of U.S. and international security assistance forces in Afghanistan and Iraq, was forced to resign from his CIA post when it was revealed that he had shared clasified information with his biographer, with whom he was also having an extramarital affair.
Petraeus pleaded guilty to one misdemeanor count of mishandling classified information.
Gaining fame, power and wealth can be a risky business. But as these four show, the whiff of scandal may do serious damage but it rarely banishes them entirely from the bright lights and the eager audiences.