Posted on 10/19/2010 8:55:17 AM PDT by reaganaut1
Jane Buchan is a rarity in the big-money boys club of hedge funds.
Amid the testosterone-fueled trading floors of Wall Street, Ms. Buchan has not only built a hugely successful hedge fund investment firm but also one that is, on paper, owned and run by women.
But questions have surfaced about whether her firm, Pacific Alternative Asset Management Company, is now or ever was controlled by women at all.
It turns out that S. Donald Sussman, a hedge fund mogul who has bankrolled some of the biggest (male) names in the business, has quietly stood behind Paamco for years, pocketing much of its profit. A recent court ruling officially put a chunk of Paamcos parent company in his hands.
Equally troubling is the suggestion that Paamco, which collects tens of millions of dollars in fees annually to vet hedge funds for pension funds and other clients, disguised aspects of its own business from its customers, partners and federal regulators.
The arrangement with Mr. Sussman may have been designed to mislead a number of observers, from the tax authorities to the S.E.C. to entities wishing to invest in women-owned businesses, Judge Richard J. Sullivan of the United States District Court for the Southern District of New York wrote in an August ruling in the case, which centered on a contract dispute between Mr. Sussman and Paamco.
In an e-mailed statement, Paamco said its relationship with Mr. Sussman had not been structured to mislead anyone and that the transaction in question had been properly treated, and approved by the firms legal advisers and auditors.
Furthermore, Paamco said it had never taken any set aside business or minority mandates.
(Excerpt) Read more at nytimes.com ...
he's the guy who recently flew our old friend Barney Frank to somewhere on his $25M jet, and whose residency in the US Virgin Islands is being questioned.
The crooks turn up everywhere.
So this Sussman guy is the man who gave Bawney a ride to the USVA in his jet, eh?
Of course, sketchy business characters like him would be big lib donors, after all, they live to game the system and you do that by owning the guys who write the rules.
As for this particular example, it’s quite interesting. I gotta give the NYT writer credit here, it’s very easy to understand. Usually with financial and political scandals it always seems to this lowly peasant that the writing is deliberately designed to keep us rubes confused and befuddled when, in reality, scandalous behavior tends to be all too simple under the camouflage and obfuscation.
The thing I note here is that the skirt-owned schtick was Jane Buchan’s idea, not Sussman’s. He was merely making an investment in a promising prospect and Ms. Buchan wanted to keep his name off the books in order to claim her outfit was “woman-owned”. I’ll give them the benefit of the doubt that they never “officially” took advantage of minority set-asides, merely made it look like they were and let their institutional customers think so. The main point here seems to be that our culprits had a falling out and Ms. Buchan and her pardners wanted to rewrite the deal but, unfortunately for them, Mr. Big had nothing to lose by blowing things up in court. The main LEGAL point seems to be that the Judge decided this unconventional arrangement does not obviate the fact that Sussman IS still officially a 40% owner of the company and they cannot call themselves “woman-owned” after all.
Hyuk, yuk! If this was a conventional minority-ownership gambit the moneybags would have had to marry Jane and transfer ownership of the company to her.
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