Wall Street Folly

• Jamie Dimon Op Ed: No more ‘too big to fail’
• Barofsky Says TARP ‘Almost Certainly’ Will Bring Loss to U.S.
• Pay czar backtracks
• Robin Hood Says ‘Hell Yeah’ to Recovery Led by Goldman Bonuses
• Corzine to Aid Christie Transition, Has No Post-Governor Plans
• Citadel’s Moment for Redemption
• Eliot Spitzer Avoids Talk of Hookers in Harvard Ethics Speech
• Buffett Says U.S. Should Put Pressure on CEOs of Rescued Firms
• Two potential buyers closing in on Playboy Read the rest of this entry »

Tags: Bank of America, Bonuses, Citadel, Compensation, Eliot Spitzer, Goldman Sachs, Hedge funds, Hookers, Jamie Dimon, Jon Corzine, JP Morgan, Pay czar, Philanthropy, Playboy, Scandal, Warren Buffett

• SAC Capital Ex-Analyst Under Probe in Inside Case
• Ex-Balyasny Analyst Linked to Fortuna in Galleon Trading Case
• In Charity Tax Filing, a Glimpse of Goldman
• Bear Stearns Loss Echoes Long Line of U.S. Prosecution Defeats
• Feds may change tactics after Bear
• Billionaire Bill Gates says Wall St pay too high
• White House Aims to Cut Deficit With TARP Cash Read the rest of this entry »

Tags: AIG, Bear Stearns, Galleon, Gold, Goldman Sachs, Hedge funds, Insider Trading, Legal, Philanthropy, Politics, SAC Capital, TARP

Because of his philanthropy over the last 15 years or so, some thought that former Drexel junk bond king Mike Milken would have a good shot at getting a pardon from President Bush before he left office.  But it didn't happen.  Alan Dershowitz thinks it's because of Marc Rich….

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Tags: Drexel, Mike Milken, Philanthropy, Politics

Madoff's £113m UK fund Inquiry Finds No Signs Family Aided Madoff Madoff feeder funds levied high fees Madoff Victims Look for Ways to Recover Their Money Madoff Ran Vast Options Game The conman, the dream – and the sharp suit SEC Didn't Act on Madoff Tips Noel's Hedge Fund Unlikely To Survive Madoff Blow Tremont Invested More Than Half Its Assets With Bernard Madoff Madoff creditors braced for write off Merkin Gets Questions on Madoff Impact on Jewish Charities Is Catastrophic Giant Wall St. Fraud Leaves Charities Reeling L.A.: Madoff debacle hits region's Jewish community Bernie Madoff's $50 million swindle takes toll on Police Athletic League British banks losing billions to ‘one big lie’ in biggest ever fraud Spielberg and Katzenberg Get Hit The $50bn hedge fund audited by a one man band and a secretary

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Tags: Bernie Madoff, Hedge funds, Legal, Philanthropy

That’s more than three times last year’s record auction haul of $650,100!  This year’s winner was Chinese hedge fund manager Zhao Danyang, manager of Pureheart China Growth Investment fund.  His winning bid was a whopping $2,110,100. 

Buffett has conducted annual auctions benefiting the Glide Foundation for the past nine years.  The first three, not on Ebay, brought in $18-$25K a piece. Starting in 2003, the auctions were listed on Ebay, with Greenlight Capital’s David Einhorn paying $250K for lunch with Buffett.  The bids have mostly escalated higher ever since culminating in this year’s humongous record.

Buffett Has $2.1 Million Lunch Date With Hedge-Fund Manager – Bloomberg

Tags: Ebay, Philanthropy

It’s that time of year again for what’s be come an annual event.  Warren Buffett is auctioning off another lunch on Ebay that will benefit the Glide Foundation. The winner can bring up to seven friends to dine with him at New York’s Smith and Wollensky at a mutually agreed upon date.  Current bidding stands at $77,100 and it closes Friday evening (6/27) at 10PM eastern time.

Last year’s winning bidder, Mohnish Pabrai, who runs Pabrai Investment Funds and is an avid Buffett disciple, paid $650,100 to dine with his idol.  He had bid for years before being successful.

Warren Buffett Power Lunch to Benefit Glide Foundation – Ebay

Update: As it turns out, today is the day that last year’s winner is collecting on his winning bid.  Warren Buffett is at Smith and Wollensky’s for lunch with Mohnish Pabrai, who will be interviewed on CNBC at 4:30 to talk about the meeting.

Tags: Ebay, Hedge funds, Philanthropy

Last night’s annual Robin Hood Foundation gala, held at the Javits Convention
Center, raised over $56.5 million for New York charities according to the
organizers.  Attendees numbered around 3,700, including KKR founder Henry
Kravis, and Pequot Capital’s chairman Art Samberg.  Entertainers in the
crowd were also plentiful, including rapper Jay-Z, Rush Communications Chairman
Russell Simmons, former Talking Heads head David Byrne, and former NBC anchor
Tom Brokaw.  Conan O’Brien was the host for the evening.  Performers
included Columbian hip shaking cutie Shakira as well as Sheryl Crow and John
Legend.

Musician David Byrne, who attended the gala with his girlfriend Cindy Sherman, said the gala bustling with so many entertainment and finance-industry stars was “quite a scene.”

“The bids are probably going to be outside of my tax bracket,” Byrne said in an interview about the event’s auction while waiting outside the Javits Center.

After a dinner of filet of beef, grilled chicken and bow-tie pasta, the attendees listened to live music performed by Shakira, the hip-twitching Colombian pop singer, and rock star Crow, who made a surprise appearance and took the stage for a rendition of “Lean on Me.”

Robin Hood Raises More Than $56.5 Million as
Shakira, Crow Sing – Bloomberg

Tags: Hedge funds, Music, Philanthropy

As thousands of Bear Stearns workers have gotten or will soon get pink slips as the firm merges with JP Morgan, former CEO Ace Greenberg is giving 25 of the firms lowest paid workers at least a small helping hand.  According to the New York Times, he’s giving them a total of $360K –  $200 a month over a six year period.  Those getting the dough include some from the mailroom as well as clerical employee.  Several have physical or mental handicaps.  In a letter to the employees, he said:

"This is a personal gift, from me to
you, and with it, I give my personal thanks."

Gift to the Mailroom, From the Boardroom – NY Times

Tags: Alan "Ace" Greenberg, Bear Stearns, JPM Chase, Philanthropy, Revolving Door

Billionaire hedge fund guru James Simons and his wife Marilyn are donating $60 million to SUNY Stony Brook for a new Physics center at the school.  Simons was the former chairman of SUNY Stony Brook’s math department and has made significant  gifts to the school in the past…

James and Marilyn Simons announced the
gift, the largest ever to a school within the SUNY system, at a press conference
yesterday with Governor Spitzer in Manhattan. The donation will go toward the
creation of the Simons Center for Geometry and Physics, where scholars will
study subjects at the cutting edge of physics, including string theory, which
scientists believe could yield valuable insights into the properties of the
universe.

"We believe there is a chance that
work accomplished at the center will significantly change and deepen our
understanding of the physical universe and of its basic mathematical
structure," Mr. Simons said.

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Tags: Hedge funds, Jim Simons, Philanthropy, Renaissance Technologies

MBIA’s chief cheerleading short seller Bill Ackman of Pershing Square Capital had a great day today thanks to nasty words out of Moody’s.  It was only last week at the Value Investing Congress presentations that the activist investor publicly proclaimed MBIA a major short and implosion candidate — he said that his cut of any profits would go to charity.  Today’s news brought him closer to making his charities a lot more flush.  MBIA closed down $5.21 at $27.42. OUCH:
   

MBIA Inc. fell the most in more than 20
years in New York trading after Moody’s Investors Service said the biggest bond
insurer is “somewhat likely” to face a shortage of capital that threatens its
AAA credit rating.

A review of MBIA and six other AAA rated guarantors will be completed within two
weeks, Moody’s said in a statement today. Moody’s revised its assessment from
last month that MBIA was unlikely to need more capital after additional scrutiny
of the Armonk, New York-based bond insurer’s mortgage-backed securities
portfolio.

“The guarantor is at greater risk of exhibiting a capital shortfall than
previously communicated,” New York-based Moody’s said. “We now consider this
somewhat likely.”

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Tags: Bill Ackman, Charts, Credit Crunch, Hedge funds, Philanthropy

Bring on the ring girls!  In what’s now become a hugely public grudge fight, Pershing Square’s activist hedge fund manager Bill Ackman has upped the ante against the bond insurers, which he’s been shorting since 2002.  Today at the Value Investing Congress he made the challenge that bond insurers MBIA and Ambac Financial would implode as soon as next year and if they do, he’ll donate the hundreds of millions in fees that he knows he’ll reap to charity.

Ackman said he personally stands to gain
about $500 million if MBIA’s holding company failed and that amount would be
donated to charity. The fund itself stands to make “multiple billions of
dollars” if the holding companies of MBIA and Ambac were to fail, he said.

“The hedge fund business is profitable.
I’ve made more than I need,” Ackman said. “I also think it’s the right thing
to do.”

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Tags: Activist Investing, Bill Ackman, Credit Crunch, Hedge funds, Philanthropy

Here’s the video of another Wall Street Boxing Charity Championship featured fight that took place last week in NYC’s Hammerstein Ballroom. This one is between Rockefeller & Co’s Louis "El Guapo" Sobong and American Technology Research’s Brian "Too Sharp" Tack.  Brace yourself for the shrieking woman cheerleading and shouting out directions at the top of her lungs to Sobong, and be prepared to adjust the volume. Otherwise, you, like us, might feel urge to become violent by the end of the tape.

You can find another featured match of Bear Stearns’ Josh "The Matrix" Weintraub lay waste to Goldman Sachs’ Shane "Second Coming" Kinahan here.

Tags: Entertainment, Philanthropy

"Don’t fuck with the Bear!!!" yelled Weintraub after claiming victory over his Goldman Sachs nemesis in less than one round at the Extell Wall Street Boxing Charity
Championship.   Here’s the blow by blow action as it went down on the evening of November 1:

Tags: Bear Stearns, Entertainment, Goldman Sachs, Philanthropy

Wall Street pros will step out of the trading ring and into the boxing ring tonight for charity.  Sixteen of Wall Street’s finest, all men, will duke it out at the Hammerstein Ballroom in NYC.  Judges for the brawls include former heavyweight champions Larry Holmes and Lennox Lewis……

When Josh “The Matrix” Weintraub
[pictured at left] of Bear Stearns Cos. steps into the boxing ring tonight, he
will have 130 supporters in his corner as he fights Goldman Sachs Group Inc.’s
Shane “Second Coming” Kinahan in a charity match.

Weintraub and Kinahan are two of the 16
Wall Street professionals — all men — who have trained since August to beat
each other up in a series of three-round bouts. Almost 800 friends, family,
colleagues and guests paid as much as $800 apiece to watch and dine on beef
tenderloin and Guinness ice cream.

The first Extell Wall Street Boxing Charity
Championship will raise money for organizations including the Prostate Cancer
Foundation and Hedge Funds Care, a New York-based group that combats child
abuse. Tuesday’s Children, which helps families of Sept. 11 victims, and Say Yes
to Education, which aids inner- city school kids, also will benefit from
tonight’s black-tie gala at the Hammerstein Ballroom in Manhattan.

“It seemed a great way to contribute my
time and energy to help the community and at the same time do something I like
to do,” said Weintraub, 37. The mortgage bond trader, who sold tickets to
friends and colleagues, is raising money for the Valerie Fund, an organization
that aids children with cancer. “The night will be full out.”

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Tags: Culture, Entertainment, Philanthropy

New York Magazine’s new Money Issue (actually the cover is titled "Dirty Money" for the likes of the David Glass Insider ring   and "Lords of Dopetown" stories) focuses on the Robin Hood Foundation and it’s board of 29 directors in one of its pieces ("Do-Good Money").  How do you get on the board?  You either have lots and lots and lots of money like the hedge fund managers (Steve Cohen, Glenn Dubin, Danny Och, Paul Tudor Jones, etc.) or banking/ other big money firm moguls (Lloyd Blankfein, Alan Schwartz, Richard Fuld, Jeff Immelt, Ken Langone) be very famous with connections so that you can help raise lot and lots of money (Gwyneth Paltrow, Diane Sawyer, Tom Brokaw). 

In addition to the privilege of being among
the anointed, membership does have its costs. The board, which now numbers 29,
underwrites the entire administration of the foundation, so that 100 percent of
donations goes to the charities Robin Hood supports; in 2007, the foundation
will spend $138 million on anti-poverty efforts. The full board meets four times
a year—usually near a program it funds, not in a Wall Street boardroom—and
additional committee meetings mean that every member has at least half a dozen
commitments in total. It has a rotating chair, currently occupied by Bob
Pittman, and exceedingly low turnover. In the nineteen years since Robin Hood
was founded, only four members have stepped down: Lachlan Murdoch, George Soros
sidekick Stanley Druckenmiller, Ted Forstmann, and Jann Wenner. (John F. Kennedy
Jr. was also a member.) Gifts from board members last year totaled $35 million;
the figures cited on the following pages reflect only that money given through
family foundations and may not represent the full amount of each member’s
giving.

Here are descriptions of some of the big money board members:

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Tags: Dick Fuld, Hedge funds, Highbridge, Ken Langone, Lloyd Blankfein, Och Ziff, Paul Tudor Jones, Philanthropy, SAC Capital

Does Stephen Scharzman’s charitable foundation have assets of only $63,424 to spread around?  In the world of big money charitable giving that’s clearly nothing. In Blackstone billionaire’s comfort food terms, it amounts to just 159 of his favorite $400-a-piece stone crabs (or 1586 of the $40-a-piece claws!)  Page Six tells us:

STEPHEN Schwarzman, the Blackstone Group
chairman whom some have called a poster boy for greed, isn’t very generous with
his billions. Schwarzman paid himself a cool $677 million when he took his
private equity firm public (retaining shares worth $7.7 billion), but his
Schwarzman Charitable Foundation has assets of just $63,424, reports Contribute
magazine. Michael Gross also says the foundation, according to its 2006 tax
return, is holding just $991 for charitable purposes. "You’ve proven you
can bring home the bacon better than anyone else right now. But so what?"
Gross writes. "When are you and your colleagues going to start spreading
around more of the pork?"

(That’s our "fun with Photoshop" ode to Steve’s love of stone crabs to the left)

Hoard the Bacon - Page Six New York Post

Tags: Blackstone, Philanthropy

The Robin Hood Foundation, the charity founded by Paul Tudor Jones is drawing scrutiny from beady eyed congressional witch hunters.  Why?  Because of investments that the charity’s has made in some of the 19 hedge funds who sit on its board, including Jones’ Tudor Investments and Steve Cohen’s SAC Capital.  Never mind that the value of those funds has skyrocketed over the last ten years — congress is eyeing the fact that the funds invested are earning fees, causing what they believe is a conflict of interest.  We say: Bullshit.  Congress needs to get a life:

Now one of the charity’s projects — a
rainy-day fund that has grown to $144.5 million from $20 million in less than a
decade — is drawing scrutiny from lawmakers in Washington. Their main concern:
About half the money is invested in hedge funds run by Robin Hood donors or
board members, who have been paid the industry standard fee of 2 percent of
assets and 20 percent of profit for managing the donations.

“I don’t remember Robin Hood keeping two and 20 as his cut,” says Senator
Charles Grassley of Iowa, the top Republican on the tax-writing finance
committee, which also oversees charities.

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Tags: Hedge funds, Paul Tudor Jones, Philanthropy, Politics, SAC Capital

It’s that time  of year again for what’s become an annual event since 2000 — Warren Buffett is auctioning off a Power lunch on Ebay  with proceeds donated to the Glide Foundation.   The opening bid was $25,000 and the action ends on June 29.  The winner gets to bring up to seven of his/her friends to dine with Buffett at Smith & Wollensky.  Last year’s winner was Yongping Duan who forked over $620K for The Oracle of Omaha’s pearls of wisdom.

Tags: Ebay, Philanthropy

The Speechmaker: How Bill Gates Got Ready for Harvard Boom Aside, Not All LBOs Look So Hot

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Tags: Bill Gates, Harvard, LBO / MBO, Philanthropy

Hedge fundraising Billionaire pledges $100M to university Bill and Melinda Gates Foundation donates $100 million to U of Washington

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Tags: Bill Gates, Endowments, Hedge funds, Philanthropy

and not everyone’s totally comfortable with it:

Traditionally, the annual fund-raiser for Big Brothers Big Sisters of Massachusetts Bay was a staid affair: A string quartet played, Red Sox tickets were auctioned and empty seats abounded. The event was lucky to raise more than $200,000.

All that changed after several hedge-fund types joined the board of the nonprofit mentoring organization. This year the January bash was themed ’80s Prom Night and featured live music by Hall & Oates as well as a specially designated "make-out room." Several board members came dressed in drag, including James Pallotta of the hedge fund Tudor Investment Corp. The event raised $1.8 million — $80,000 of which came from auctioning off a role in a coming Farrelly brothers movie.

Big-money financiers from hedge funds and private-equity firms have a new takeover target: the charity ball. As the wealth of hedge funds and other alternative investments soars, nonprofits from San Francisco to New York are trying to recruit the crowd for their own boards of directors.

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Tags: Hedge funds, Philanthropy

92 year old Columbia alum and Metromedia founding billionaire John Kluge is expected to make one of the largest ever gifts to a university by giving them $400 million:

A vice president of the philanthropic John W. Kluge foundation, David Finkelstein, confirmed last night that the foundation would donate more than $400 million, to be directed toward financial aid. Mr. Finkelstein said Mr. Kluge loves Columbia "very dearly," but he declined to offer further details about the gift.

Mr. Kluge, an immigrant from Germany, graduated from Columbia in 1937 and went on to earn his fortune in the broadcast industry, buying and selling television and radio stations and later branching into restaurants, among other businesses.

Forbes magazine listed Mr. Kluge’s net worth at $9 billion in 2006, and he has given millions of dollars to various philanthropic causes, including the Library of Congress. Tax forms for his foundation list donations to recipients varying from cancer research organizations to a Shakespeare company.

$400 Million From Kluge for Columbia – New York Sun

Tags: Philanthropy

Warren Buffett, a well known bridge enthusiast, proved that he’s not an expert at all card games during a Texas Hold’em charity poker tournament last Thursday.  It took a mere 45 minutes for him to go bust at the event with 50 amateur, celebrity and professional players at the event, benefitting Make-A-Wish in Nebraska.

“It’s different than bridge,” said Buffett, 76, the chairman and CEO of Berkshire Hathaway Inc. “I was confused. I thought the low score won.”

The tournament celebrated a recent $5 million renovation of retailer Borsheims, which is owned by Berkshire Hathaway.

Billionaire Buffett bombs at poker table – Boston Herald

Tags: Philanthropy, Poker

From Page Six:  Leona Helmsley, the notorious "Queen of Mean", has been in a giving state of mind.  Also, Peter Luger, one of Wall Street’s favorite steak houses, has spawned new competiton:

We Hear . . . THAT Leona Helmsley made a rare appearance at her hotel, the Park Lane, yesterday to give a whopping $25 million to New York-Presbyterian Hospital for expansion of its comprehensive digestive diseases program.  THAT another veteran of Peter Luger has ventured across the river to open up a steak place of his own. The latest, Arturo, is the owner/chef of Benjamin’s in the Dylan Hotel . . .

We Hear . . . - Page Six New York Post

Tags: Philanthropy, Restaurants

How much would you pay for the chance to throw three balls at John Mack to watch him hopefully get dumped in a big vat of water?  Morgan Stanley employees will get to answer that question when they get to bid on the right to dunk him for charity at a county fair next weekend at the company’s Westchester campus.  The money will go to the Morgan Stanley Children’s Hospital of New York-Presbyterian in Manhattan.  The winning bidder will also win dinner with Mack and his wife Christy.

A spokeswoman for the Wall Street firm says Mr. Mack will be wearing street clothes instead of any exotic swimwear. Alumni, including those who left the firm last year amid the bitter civil war that ended in Mr. Mack’s return, aren’t eligible to participate.

Bids & Offers: Cold(-Water) Calling; Morgan Stanley’s Mack
May Try a Different Float – Wall Street Journal

Tags: John Mack, Morgan Stanley, Philanthropy