Ponzi Ponies are Safe

Following inquiries with locals in North Salem, I am happy to report that the ponies formerly stabled with Paul Greenwood, the alleged fraudster, are safe.

They were quickly moved and dispersed among other stables up and down the East Coast as Greenwood realized the net was closing in on him, according to local sources.

What no one knows – or wants to say – is who is now paying for their current upkeep.

If it is in fact Paul Greenwood, then that is a problem since Greenwood’s alleged victims want their money back in their pockets or mattresses, not in a horse farm.

The good news is that the spotlight on the creatures, hopefully ensures the attention of the ASPCA and some good comes out of this sorry mess.

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Concern for Ponzi Ponies

For all those worried about the hundred or so valuable show ponies stabled in North Salem by alleged fraudster Paul Greenwood and his wife Robin, let me give them an update – with hopefully another to come.

After Greenwood, 61, and his partner Stephen Walsh were arrested last month for allegedly siphoning off $500 million from Greenwood’s money management Group, Westridge, all assets were frozen, barring those on the payroll of his business.

Many locals up in North Salem were worried for Greenwood’s horses, because it was assumed the heating in their state-of-the-art barns would be switched off.

“These animals cannot survive outside,” I was told.

Alarmingly, the night before I was due to air my report on CNBC on Friday February 20th, the animals vanished.

So I rang one of the SEC lawyers whose name is listed on the complaint against Greenwood and Walsh. The lawyer’s name was David Rosenfeld. Rosenfeld was astonished at first. “No one has called me about the horses,” he said, but nonetheless he assured me that he would look into the matter and make sure the horses were all right. “You came to the right person at the SEC. I’m an animal lover,” he said.

Like many, I read the report in the New York Post today claiming that the horses were missing and unaccounted for. So I have left a further message with Mr. Rosenfeld to check on their status. I will keep everyone posted when I hear back.

I find it hard to believe that anyone could disagree, that while the alleged perpetrators of a Ponzi scheme should pay, innocent creatures should not.

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Pity the poor Englishman in Manhattan

My English friend was worried. “I guess the next step is getting American-accent lessons,” she said over dinner the other night.

She is a peer of mine — we were at Cambridge together — and she has wound up in New York working in a senior position for an American bank on Wall Street. We frequently joke that she must have done something appalling to be punished for her timing. She arrived in New York in September, since when she has hardly had time to think. But her point about having to get an American accent has a serious premise.

She — like most of my British friends here — is furious at the new protectionist amendments to the administration’s stimulus bill. The changes to the law will not only prohibit free trade but will severely limit the number of H-1B visas given to “exceptional foreigners” to work in banks that have taken funds from the government’s Troubled Asset Relief Program.

That means that Britons who were due to start work here later this year will have their job offers rescinded.

So much for Gordon Brown’s notion of a “global solution” that he’s been busy foisting on President Obama — to a noticeably cool reception here.

Ever since I’ve lived in New York, I’ve watched English compatriots come and go. They’ve worked and partied more intensely than they knew they were capable of — and Manhattan has embraced them as it welcomes anyone who wants to live with the ferocity of a lion.

Now, thanks to the amendment, any jobs will go to Americans. The ideal of American meritocracy seems to be dying along with the economy.

Another British friend, also senior on Wall Street, is furious. “To do this is un-American.

“It’s uneconomic,” he fumed, noting his bank will probably still have to pay the new hires their signing-on fees — a waste of money as it can’t give them a job.

And for those foreigners who already have H1-B visas? I have a cautionary tale. A 30-year-old British banker at Bank of America on an H1-B visa was told he’d be promoted, but was then fired, and left with not enough money to get his belongings back to the UK.

American friends I told rolled their eyes. “We sympathise about the protectionism point but not the firing point,” said one. “This is America. You get hired. You get fired. Get over it.”

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Did Thierry de la Villehuchet Invest in Fairfield Greenwich?

Among the articles in Vanity Fair’s April issue is a report I did on the Noels, the infamously good-looking, gregarious family of Walter Noel, founder of the investment group Fairfield Greenwich, which had $6.9 billion—almost half of its assets under management—invested with Bernie Madoff. Now that that money is all gone, Fairfield Greenwich is being sued by investors. The piece shows how the Noels are being criticized for their seemingly callous behavior in the wake of the devastation that has been caused.

On Tuesday night, Marisa Noel Brown—at 31, the youngest of the Fairfield Greenwich Noels, married to former F.G.G. partner Matt Brown—found herself co-hosting a surprise birthday party for a friend at 740 Park Avenue, New York’s toniest address. (She emailed me proof earlier today that she had never been asked to be put on the invitation). Nonetheless she’d been at planning meetings organizing the guest list. Meanwhile her brother-in-law Andres Piedrahita, 50, who owns 22 per cent of F.G.G., was seen traveling in Switzerland. This week he was seen in St Moritz. As for Walter? He and his wife, Monica, 67, attended small dinners following a brief holiday in Mustique.

After my story appeared, Monica complained she didn’t like the social criticisms it had made about the family—namely that they had tried to get into the Shinnecock Hills Golf Club, and had been blackballed from the Bathing Corporation of Southampton. These seemed to be her chief concerns. So imagine my dismay when something I’d heard a couple of weeks ago was confirmed last night—too late to be included in the original piece, but not too late to state here, or on MSNBC’s Morning Joe yesterday morning.

Thierry de la Villehuchet, the 65-year-old French-born financier who tragically killed himself on the night of December 22 in the New York offices of Access International, had sold—and subsequently lost—a $1.4 billion fund with exposure to Madoff to many of his French and European friends. It was recently explained to me that he had also invested his own money with Fairfield Greenwich. (When an F.G.G. spokesperson was asked about this, he responded, “A senior officer at Fairfield Greenwich has searched its records and found that the company has no shareholder of record in any Fairfield Greenwich funds by his name or his fund’s name.)

Suddenly the Noels’ concern with their social status seemed glaring. Why focus on criticisms of your social life when a man who was a friend and client of the family business is dead and others who invested with you have been financially ruined?

No wonder there is all the talk of social revolution and calls for heads on Wall Street. Some of this is indiscriminate and arguably over-the-top. We need people of caliber to fix this financial mess and we need to incentivize them. But the Noels, having profited from Madoff and with apparent insensitivity to the ramifications of their actions, are the poster children for the reasons we are now in this place.

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Inside the Mini-Madoff Scam

New York’s latest financial criminal mastermind — and remember, we now have one a day being unveiled — is Paul Greenwood, 61, the bow-tied town governor of North Salem, New York’s horsey area. (Until recently it’s where the American Olympic equestrian team trained.)

Greenwood spent the alleged $500 million he is accused of siphoning off from his money management business, which he was supposed to invest for universities and pension retirement funds, on an elaborate stable of valuable show ponies — oh, and a $70,600 teddy bear.

Who knew that teddy bears could fetch $70,600? Certainly the residents of North Salem did not. They amused themselves the day after Greenwood’s arrest by FBI agents last week by passing around a stuffed toy bear dressed in a T-shirt emblazoned with the words “jail bait”. You have to hand it to the people of North Salem: 10 points for humour. Zero for your choice of governor.

Locals told me that they’d voted for Greenwood for governor last year even though few of them actually liked him. “He was aloof,” said one. “Odd,” said another. Patricia O’Neill, a local teacher, spent every New Year’s Eve with him — and noted he sat in a corner and didn’t speak to anyone. Not, one would have thought, a man shouting out to win a popularity contest, let alone to run for town governor.

Yet when he ran for office he was unopposed. “We all thought he’d got the most clout to lead the community,” a resident explained. Loosely translated, this means he’d got the most money.

Well, at least now everyone’s getting poor we can recorrect our vision and see people for whom they really are. Heck, we can even label them for what they really are. Gone are the days when we sycophantically described people who were rich as “nice” — or, when desperate, “interesting”.

I hope the good people of North Salem hoist their new teddy bear high before they vote for their next governor (after Greenwood does the right thing and resigns, which he hasn’t yet).

That bear should remind them that odd people should not be put in charge of communities. It doesn’t matter if, as Greenwood did, they hold Bible study sessions and give (allegedly illegal) money to charity. Odd is just odd, no matter how much money such people have.

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The price of a teddy bear picnic – £50,000

Who knew that teddy bears could fetch £50,000? Certainly the residents of North Salem did not. They amused themselves the day after Greenwood’s arrest by FBI agents last week by passing around a stuffed toy bear dressed in a T-shirt emblazoned with the words “jail bait”. You have to hand it to the people of North Salem: 10 points for humour. Zero for your choice of governor.

Yet when he ran for office he was unopposed. “We all thought he’d got the most clout’ to lead the community,” a resident explained. Loosely translated, this means he’d got the most money.

I hope the good people of North Salem hoist their new teddy bear high before they vote for their next governor (after Greenwood does the right thing and resigns, which he hasn’t yet).

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Let frivolous fashion defy the NY blues

New York Fashion Week is here – and, as Lela Rose, the Texan designer, says as she threads her needle and fits her models, “the show must go on.” “We need a little pick-me-up,” she emailed me, “and I actually think the upcoming week should be a way to move forward. That doesn’t mean we aren’t all facing reduced orders.”

Fashion week is an apt metaphor for what we are all doing: namely, getting on with our lives, still enjoying the “pick-me-ups” like lunches or dinners with friends, but in a different way from before. Friends email to ask me to lunch, but as we make the arrangements I’ve noticed we establish two or three weeks ahead of the engagement both who will be paying and where the venue will be. The unspoken reason for the latter is that there will an inbuilt cost for the person who has to travel.

Then there’s travel itself. It isn’t just Ken Lewis, chief executive of Bank of America, who finds it now takes him eight hours to get to congressional hearings in Washington rather than hopping on the corporate jet as he used to before we made him sell it. The rest of us now find when we travel we stay with friends, rather than in hotels, and we all fly economy, not business.

Of course, it’s necessary financially, but I do wonder if the result is really worth it. I discovered many years ago that if I had to step off a plane having missed a night’s sleep I was pretty hopeless at being productive. So I couldn’t help agreeing with New York Mayor Mike Bloomberg when he proclaimed that a journey of eight hours “was a hardly a good use of the CEO of Bank of America’s time.” Mayor Bloomberg added: “We’ve gotten so skittish about some of these things. The populist attitude of ‘Let’s go and cut out any frivolity’ just doesn’t make sense.”

He has a point. I’m all for regulating Wall Street and trimming the fat cats whose excesses led us down the path of destruction but let’s at least keep some perspective, and, above all, our humour and joy.

Lela Rose agrees, aesthetically, at least. She’s promised me she’ll show “jewel tones and really beautiful color, even a purple floral trench not sad, depressing clothes.” After all, no one ever suggested that fashion needed to reflect reality.

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Bad times bring out the best in Manhattan

Another day, another one bites the dust. Friends everywhere are losing their jobs.

They’re bright. The New York Times described the growing ranks of the city’s unemployed as the new chic club in town. In part, this is because the people who are losing their jobs are the best and ergo the most expensive talent around. I have been bewildered to see some of the cleverest people I know go down, while five goons get left sitting in their office chairs.

They’re also mostly male. A study last week claimed that one result of the massive job cuts was that for the first time ever, women are poised to surpass men on America’s payrolls: 82 per cent of the cuts have been men.

For those left in work, the cuts seem illogical. A really busy, productive photographer friend tells me he got an email from a bureaucrat’s young female assistant asking him to account for every paper clip, pencil and battery in his desk — with suggestions of cheaper places to buy them. Why, thought my friend, didn’t they just cut the cost of the assistant, if she had time on her hands to add up how many paper clips he was using?

But cost-cutting bureaucrats are not thinking in these panic-stricken times. In one large media company the interns — rich 21-year-old inheritors with zero experience — have taken over.

Fortunately some managements have not entirely lost their heads. At JP Morgan Chase, associates are being promoted to vice presidents — but without any pay rise. The promotion is a signal you’re wanted to stay on. The signal that you’re not is what’s called a “message bonus” — that is, a bonus of zero.

Meanwhile, various IT companies and hedge funds have told employees to make a collective decision: take a pay cut or some of you will be fired. Hearteningly, people are taking the pay cut.

And that’s the interesting thing about these times: we see who people really are. For the most part, the collective anxiety has brought out the best in people. I’ve never been prouder of the friends who’ve stoically accepted the axe but have kept their ideas flowing and their sense of humor — even as they hunt for work in places where the sign “nothing available” hangs metaphorically above the door.

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Cloud-cuckoo-land on Wall Street

“How much should a Wall Street CEO get paid?” The question got bandied around on Thursday night at dinner — by a bunch of Wall Street CEOs.

The question was the topic of the day following coverage of the extravagant ways of John Thain, former CEO of Merrill Lynch, who spent $1.2 million on his office furnishings: $28,000 on curtains, $10,967 on a lampshade, $1,400 for a waste-paper bin, $88,000 for a rug and so on. Media speculation centered on a $35,000 commode — until it was pointed out that the commode was a cupboard.

Still, people were furious with Thain, who had sold Merrill to Bank of America in September without telling BoA’s chief Ken Lewis about nearly $15 billion of losses on his balance sheet or that he planned to push through billions in bonuses to his Merrill staff, unusually — ergo surreptitiously — before the end of the year. All this was to be paid for, in part, by the government bail-out money given to the merged bank. In retrospect, no wonder that a few months ago he was the only CEO on Wall Street with the gall to ask for a $10 million bonus at a time when the government was dolling out survival packages.

The man is clearly completely oblivious of the times. He needs to rewind Obama’s inauguration address and listen over and over to the part about greed and excess.

Thain’s extravagance has not only cost jobs but poor Lewis has had to go back to the Treasury, cap in hand, to beg for more taxpayers’ money — $138 billion, to be precise.

So when the CEOs at dinner started knocking around speculative figures and one ventured: “$15 million maybe?” I decided to speak up on behalf of taxpayers, now bank owners.

“You guys are speaking vernacular that is PS [pre-socialization]. You have to stop. Let’s assume you don’t pay yourselves anything until you actually start making profits that pay me back — the person who has subsidised your $80,000 carpet.” There was silence and head-scratching and muttering that maybe I was right.

And since we are talking about $80,000 carpets I have a new idea for anyone who runs a bank or firm subsidized by government money. Office photos should be mandatory and publicly displayed so we can be sure our taxes aren’t subsidizing photo-shoots for interior decor magazines.

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Let’s Hear From The Madoff Women

Every day turns up an astonishing new detail of the incredible story of Bernie Madoff and his $50-billion Ponzi scheme: aside from Obama’s inauguration, New York can talk of little else. And some of the new angles are very odd.

It’s just been reported that Bernie’s late mother, Sylvia, herself had stock-trading troubles. In 1963 the Securities and Exchange Commission began a probe of broker dealers, including Sylvia, who had had her husband, Ralph’s business transferred to her, possibly because the couple was in financial trouble. Sylvia helped her husband out – at great risk to herself. The case was later dropped.

Then it turns out that 17 years ago, the SEC investigated a friend and feeder to Madoff, accountant Frank Avellino. The SEC believed Avellino was running a Ponzi scheme. He told investigators that most of his returns were being generated by Madoff. But the SEC checked Madoff’s books and could see nothing wrong.

Now it emerges Avellino has kept funnelling funds to Madoff all these years. His housekeeper is suing him for taking $200,000 of her money to invest (with Madoff) and then losing it. One thread in all this leaps out at me: the important role of women in this saga – and not just Sylvia Madoff.

Avellino met Madoff through Madoff’s father-in-law, Saul Alpern. The role of Ruth Madoff, a glossy blonde, has as yet gone unreported. But do we really believe Ruth knew nothing of her husband’s business? The couple spent an unusual amount of time together – just the two of them.

Then there’s Madoff’s sister, forced to move from her Florida home, so I am told, because of threats. Her son worked for Madoff. I know of at least one instance where a feeder fund was led by men who got to know Madoff through one of their wives.

Meanwhile Madoff’s son, Andrew, had divorce papers served by his wife Debbie the day after Bernie’ s confession. Yet the pair was seen happily shopping together shortly after. What, we all wondered, was really going on?

So while the daily reports of financial mismanagement are indeed gripping, what I really want to know is this: what do all the women in this saga have to say? Only when we hear from them will we properly unravel this bizarre affair.

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