Taubman Says Caspersen's Impact `Extraordinarily Modest'

  • PJT says Caspersen deceived clients to get $9 million in fees
  • About $5.6 million expected to be covered by insurance

Paul J. Taubman, founder of the investment bank that employed Andrew Caspersen before he was charged in a plot to defraud investors of $95 million, spoke publicly for the first time about the high-profile case and said the impact on his firm is “extraordinarily modest.”

PJT Partners Inc. released first-quarter results Monday and said it took a $3.3 million charge related to Caspersen, a scion of a gilded New York family who was fired March 28 and is negotiating a plea deal with prosecutors. 

Caspersen duped billionaire Louis Bacon’s Moore Charitable Foundation out of $24.6 million and one of its investment advisers of $400,000, the charity said. Prosecutors said Caspersen unsuccessfully tried to solicit an additional $20 million from the foundation, and $50 million from a private-equity firm. Taubman said his firm’s review of Caspersen’s three-year employment showed he “acted alone” in the fraud.

“If I look back at the disruptions and dislocations to our business given the amount of press attention here, I would submit it was an extraordinarily modest impact on our business,” Taubman said on a conference call discussing first-quarter results.

Insurance Reimbursement

PJT said it took the $3.3 million charge in the first quarter after determining that it will probably receive a $5.6 million insurance reimbursement. Net income for the three months ended March 31 was $255,000, or 1 cent a share, the company said.

Investors had punished PJT after Caspersen’s arrest, knocking the stock down as much as 25 percent when criminal charges were announced on March 28. But on Monday, PJT shares rose $1.32 to close at $23.06 in New York, narrowing their decline for the year to 18 percent. Taubman said most operations at the company weren’t hurt by the Caspersen allegations.

New Details

Taubman and PJT provided new details about what the firm has said was Caspersen’s $8.9 million theft from two clients making payments on fees due to the firm for legitimate transactions. He used false invoices to misdirect client payments to himself rather than the firm, according to PJT. Caspersen covered up that theft by paying the firm with funds that “most likely came from the proceeds of the fraudulent investments,” Taubman said on the conference call.

“Once the evidence confirms this belief, we would expect these funds to be returned to one or more of the victims entitled to receive them, thereby reducing their loss by $9 million,” Taubman said.

PJT Partners was formed last year when Taubman merged his firm with an advisory business of Blackstone Group LP, and the combined company was spun off from the private-equity giant. The investment bank began trading as an independent company on the New York Stock Exchange in October.

PJT learned of Caspersen’s potential misconduct in early March and hired a law firm to conduct an internal review. Caspersen, a Harvard Law graduate who worked for the Park Hill business at PJT, was arrested at an airport on March 26 and later charged with securities fraud and wire fraud.

The former managing director cheated family and friends out of an additional $14 million, Taubman’s firm said in April when it released findings of its investigation. The investment bank said Caspersen’s actions started in late 2014, when Park Hill was still a part of Blackstone.

Caspersen’s attorney Paul Shechtman didn’t return a phone call seeking comment. A court document made public last week said that plea talks between Caspersen and prosecutors were ongoing.

The case is U.S. v. Caspersen, 16-mj-2011, U.S. District Court, Southern District of New York (Manhattan).

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