‘My Assets Control Me’ Is Finance 2010: Susan Antilla
The year opened with Sandy Weill whining in a New York Times article that he was horrified to be depicted as a greedy, out of touch Wall Streeter for jetting to Cabo on the Citigroup plane weeks after the bank took a $45 billion taxpayer bailout.
The year wound down with financier Steven Rattner, just having wrapped up a $6.2 million settlement with the Securities and Exchange Commission to resolve a pension kickback probe, harrumphing in November that he wouldn’t be “bullied” by the New York attorney general’s $26 million lawsuit citing related allegations. As if anyone was worried that the politically connected, press savvy former reporter -- who today agreed to pay $10 million in restitution to New York State -- was at any risk of getting pushed around.
There was no dearth of silliness, sleaziness or shameless egomania among those in the financial industry or those who regulate it over the past year.
Over at the SEC, for instance, porn-watching was so popular that the agency’s inspector general, David Kotz, was asked by Senator Charles Grassley for a synopsis of his various smut probes. Thus, Kotz’s X-rated “summary of pornography-related investigations” was published this year.
Stock brokers, in turn, earned the usual headlines for greed. In one case, a former Merrill Lynch broker persuaded the firm to hire him based on phony pay stubs that he whipped up to suggest he was a big producer. Steven Mandala treated himself to a red 2006 Ferrari F430 Spider after Merrill gave him a $780,000 loan, didn’t show up to work much, and resigned less than two months later. He pleaded guilty to two felonies in May and was sentenced in June to as many as six years in prison for the scam.
All of the above, though, are but runners-up in this year’s Seven Deadly Sins derby. The winners are as follows:
-- The Wrath Award, to Jay Korff, former financial adviser at Morgan Stanley. Korff didn’t like it when Middlesex, Massachusetts, Probate Judge Spencer Kagan made a ruling -- subsequently overturned -- that would have cost Korff additional alimony. Prosecutors said in July that the alimony decision set off more than three years of harassment and threats to the judge by Korff from 2007 to 2010. Korff left “bizarre” phone messages for Kagan, hacked his computer and sent nastygrams about him to people whose names were in the judge’s computer address book, according to a press release by the local district attorney. Korff pleaded not guilty in July to charges of threatening and stalking.
-- The Greed Award, to Charles Antonucci, former president of Park Avenue Bank. Antonucci applied for $11 million in TARP funds in 2008, falsely telling regulators he’d invested $6.5 million of his personal money in the bank to qualify. Then the regulators did some checking and found he was dipping into Park Avenue’s coffers for home-improvement bills, and jetting around on personal trips -- the Super Bowl and the Master’s Golf Tournament -- on a co-conspirator’s plane. In October he pleaded guilty to charges he lied to regulators and embezzled bank funds. Prosecutors say he was the first person convicted of trying to defraud TARP.
-- The Sloth Award, to the 60 companies on the Fortune 500 list who haven’t a woman among their directors. The research firm Catalyst Inc. released numbers in December that painted a pathetic picture of the work being done to beef up women’s roles at the biggest U.S. corporations. Among those with no women board members are Live Nation Entertainment, General Dynamics and Dollar General.
-- The Pride Award, to Kristin Davis, the Manhattan Madam who did four months at New York’s Rikers Island lockup for promoting prostitution. Davis, who describes herself on her Web page as a former vice president at an unnamed hedge fund, claims to be one of the madams who supplied call girls for former New York Governor Eliot Spitzer. She got the 23,000 signatures she needed to be certified for a run for governor in 2010, but no permanent ballot spot. She quotes Abraham Lincoln on her fate: “My great concern is not whether you have failed, but whether you are content with your failure.” Let’s hope she’s content enough to stick to the call girl business in the next election.
-- The Lust Award, to Michael Lallana, the former Northwestern Mutual Investment Services field director arrested in August for allegedly depositing his semen into a female coworker’s water bottle. In September, he pleaded not guilty to six misdemeanor counts of releasing an offensive material in a public place and one count of assault.
-- The Envy Award, to TCW Group Inc. and to its former chief investment officer Jeffrey Gundlach. TCW sued Gundlach in January for allegedly stealing company information to use at Gundlach’s new firm. Gundlach countersued, saying TCW fired him to avoid paying him the money it owed him. Too bad they didn’t stay friends: TCW unearthed a cache of pornography in one of Gundlach’s offices -- “vestiges of closed chapters” of his life, Gundlach said in a letter to clients. Now, both Gundlach’s new firm, DoubleLine Capital and TCW are putting up with a Justice Department probe into aspects of their split.
-- The Gluttony Award, to Marcus Schrenker, the former fund manager who faked a plane crash after regulators began to investigate him. Schrenker lived the high life with a 10,000- square-foot home, airplane and a habit of lavish gift-giving (more than 30 diamonds belonging to his estranged wife were auctioned to repay investors). By October, he could have been speaking for many of 2010’s greediest when he apologized to an Indiana Superior Court judge who sentenced him to 10 years in prison for fraud. “I let my assets control me,” he said at sentencing, summing up with precision the sorry state of things on Wall Street in 2010.
(Susan Antilla is a Bloomberg News columnist. The opinions expressed are her own.)
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