For the normally super secretive hedge fund world, this has been something of a tabloidish week.And the press is having a lot of fun with it. Well, I guess so am I.
At least four different high profile managers have been dragged into the headlines for reasons that have nothing to do with how well or poorly they invest or where they think the market is headed. The biggest surprise is that Phil Falcone and his wife are not one of the stories.
For example, headlines on Websites and newspapers last week were screaming about the SEC’s charges that Sam Wyly and his brother Charles reaped more than $550 million in undisclosed gains while sitting on corporate boards by trading stock in those public companies through hidden entities located in foreign jurisdictions to conceal their ownership and trading of those securities.
In case you forgot, the Wyly brothers were the founders of Dallas-based Maverick Capital back in 1990. Who could have forgotten the sight of Sam strutting around hedge fund conferences wearing a cowboy hat charming everyone with his Texas drawl during the 1990s? Today, Maverick is run by the less flamboyant Lee Ainslie Jr. and Wyly’s son, Evan.
Also last week, Stevie Cohen’s annoying ex-wife Patricia was back in court trying to wrest more money from the SAC Capital founder. However, she has cut her demand by nearly 92 percent, from $100 million and “a substantial, if not controlling,” stake in SAC, to a mere $8.25 million. If I were her, I would be trying to get a reality show instead.
Down in the Bahamas, Moore Capital’s Louis Bacon is back in the news. It seems that last Monday, 10 armed plainclothes police officers entered Bacon’s home looking for lethal “ultrasonic weaponry,” according to the Bahamas Tribune. Bacon was not home at the time but the police reportedly handcuffed and body-searched household staff for over three hours, before confiscating a set of industrial loudspeakers. Alas, the speakers were returned the same day.
What’s this all about? It seems Bacon is in a war with neighbor Peter Nygard, the 66-year-old international fashion mogul, who called the police on the hedge fund manager. Bacon has frequently complained about loud music and other noise pollution coming from Nygard’s property at all times of the day and night, according to the paper.
It seems the loudspeakers are being used to send piercing, annoying sound waves to Nygard’s property. A published report also noted that Nygard likes to sleep on his boat not far from Bacon’s property. You would think if you have $1 billion, you could finally live far away from neighbors without having these kinds of spats.
You may recall that earlier this year the naked dead body of Bacon’s house manager was found in the Jacuzzi on Bacon’s Bahamas estate. The individual, who lived on a houseboat docked at a marina on the estate, was said to have died of coronary artery disease.
And finally, rounding out last week’s tabloid hedge fund news was the story I earlier reported on: Former hedge fund manager Paul Greenwood of WG Trading Company and WG Trading Investors pled guilty to six charges, including conspiracy, securities fraud, commodities fraud, wire fraud, and money laundering for misappropriating $554 million in client funds in a fraudulent commodities trading and investment advisory scheme.
Imagine if hedge fund managers actually sought publicity?
