Calvert Crary, a Wall Street lawyer who crafted a business out of providing investors an edge by predicting the outcome of corporate court battles, has died. He was 69.
He died on April 6 at his home in Waccabuc, New York, about 50 miles (80 kilometers) north of Manhattan, according to his wife, Deborah Schmidt Crary. The cause was prostate cancer.
Specializing in patents, product liability and mergers and acquisitions, Crary geared his research to hedge funds and institutional investors. His newsletter, “Litigation Notes,” circulated to 35 to 60 paid subscribers, his wife said. Alan “Ace” Greenberg, chief executive officer of the former Bear Stearns Cos., was among those he advised during his career.
“There are times you can really make some dough” by following litigation, Crary said, according to a 1979 New York Times profile.
In 2009, Bank of America Merrill Lynch’s third-party research unit, Open Minds, began offering access to the newsletter to its clients.
His recent reports included analysis of Pfizer Inc.’s defense of its patent on the antidepressant drug Pristiq and the U.S. Supreme Court fight over Myriad Genetics Inc.’s patents on genes linked to breast and ovarian cancer.
Based on his accurate prediction, the Times reported, Crary’s clients made money buying shares of Berkey Photo Inc. days before it won an antitrust verdict against Eastman Kodak Co., a far larger competitor, in 1978. He also correctly predicted Advanced Micro Devices Inc.’s 1994 victory over Intel Corp. in a copyright-infringement lawsuit, according to the Times.
In “Takeover: The New Wall Street Warriors” (1986), author Moira Johnston tells of Crary, then working for Greenberg at Bear Stearns Co., accurately foreseeing legal turns in T. Boone Pickens’ bid for Gulf Oil Corp. in the 1980s.
“On Wall Street, legal disputes cause significant volatility in the price of securities,” according to the website of Crary’s newsletter. “The stocks of companies with such litigation are inefficiently priced and for this reason are ideal trading vehicles. Thus, the implications of a single verdict for investors can be profound.”
Crary long considered himself the only full-time litigation analyst on Wall Street. He said he found his niche after discovering that he “couldn’t abide the practice of law,” the Times reported him saying in 1979 when he was working for Bache Halsey Stuart Shields Inc., a securities company in New York. “I hated it.”
What did fascinate him was the stock market and the securities business.
“He had a wonderful mind,” his wife said yesterday in an interview. “Over the years he got to know how the judges ruled, and he knew when it was in a certain court their proclivity to rule one way or the other.”
Calvert Douglas Crary was born on Oct. 11, 1943, in New York City and grew up in Scarsdale, a suburb in Westchester County. His father was a stockbroker, his mother a history professor.
He graduated from Deerfield Academy, a boarding school in Deerfield, Massachusetts, and earned an undergraduate degree from the University of Michigan and his law degree from Northwestern University School of Law.
He first worked at the New York City office of law firm Brown, Wood, Fuller, Caldwell & Ivey -- today’s Sidley Austin LLP -- specializing in securities and regulatory matters.
Later, at investment banking firm Legg Mason Wood Walker Inc., he wrote a memo explaining why he believed a 1973 antitrust verdict won by Telex Corp. over International Business Machines Inc. would be overturned on appeal, according to a 1980 article in the Wall Street Journal. When his prediction came true, Crary stopped practicing law and began his new career.
In 1988, on CBS Television’s “60 Minutes,” Crary told interviewer Mike Wallace that what tobacco companies most fear is the government and the public coming to see cigarettes as “a poisonous product, disguised as a consumer product,” that is “killing off people like rabbits.” The day after the piece aired, Bear Stearns, which had held a breakfast for executives of RJR Nabisco Inc. a few weeks earlier, fired Crary, according an account in the Journal.
Crary, who soon joined investment firm Martin Simpson & Co. in New York, said he was convinced his comments factored in his dismissal, adding, “I’ll never be able to prove it,” the Journal reported. The newspaper quoted Greenberg, the Bear Stearns CEO, as saying that Crary was let go because his research “had a rather limited audience” and “didn’t pay for itself.”
Crary had three children with his first wife, Kinga P. Crary; that marriage ended in divorce. They lived in a five story, 7,000-square-foot Italianate brownstone on the Brooklyn Heights promenade that they bought in 1972 for about $200,000 and sold in 2005 for $8.5 million, which real-estate brokers at that time called the highest price ever paid for a Brooklyn townhouse, the Times reported.
Survivors include his second wife, Deborah; his three children, Gretchen P. Crary, John F. Crary and Calvert H. Crary II; and six grandchildren.
Crary was a one-person research and writing team, meaning his newsletter expired with him. “There’s nobody who can do it like Cal,” his wife said.