http://www.nytimes.com/2008/05/29/sport ... owner.html
Lots of negative things brought up regarding Iavarone.
The main thing that ticks me off is the non-payment to Keeneland because "He was unhappy with the condition of the horses he purchased".
Did he not inspect and vet the horses prior to bidding on them?
Buyers who pull this crap (and some of them do it serially) are a pet peeve of mine (as are the auction houses which often try to shirk their responsibility in situations like this and will try to lay it off on the seller).
Michael Iavarone (IEAH) article
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Hold Your Peace
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Michael Iavarone (IEAH) article
Last edited by Hold Your Peace on Fri May 30, 2008 8:38 pm, edited 1 time in total.
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bayrabicano
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Wow. Talk about shady.
I wonder if Pompa (and TC's) did proper due diligence and forged ahead anyway... Can’t fathom. Too bad they can’t revoke the sale and take the IEAH group out of the mix. I wonder when Pompa actually got paid for Brown and what would have happened had Brown broke down before the check cleared.
I wonder how many investors the racehorse hedge fund will attract with that reputation?
I wonder if Pompa (and TC's) did proper due diligence and forged ahead anyway... Can’t fathom. Too bad they can’t revoke the sale and take the IEAH group out of the mix. I wonder when Pompa actually got paid for Brown and what would have happened had Brown broke down before the check cleared.
I wonder how many investors the racehorse hedge fund will attract with that reputation?
"The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it."
- Michelangelo
- Michelangelo
Yikes. And I thought he only had a few little mob ties. Wonder if IEAH is really Michael's Laundry & Cleaning (think of $100 bills in a washing machine)...
Since he has sold off the biggest asset in the hedge fund's inventory (Big Brown's breeding rights) what do the $80 million worth of investors have left in their bag -- or are they holding an empty one?
Since he has sold off the biggest asset in the hedge fund's inventory (Big Brown's breeding rights) what do the $80 million worth of investors have left in their bag -- or are they holding an empty one?
So Run for the Roses, as fast as you can.....
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Strategic Maneuver
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WARHORSE28
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Thanks for finding this, Hold Your Peace.
"But he never worked for Goldman Sachs, and in fact was fined and suspended for making unauthorized trades at the A. R. Baron & Co. brokerage firm. Iavarone conceded Wednesday that his Wall Street career consisted of selling penny stocks at A. R. Baron and three other firms — Lloyd Wade Securities Inc., Maidstone Financial Inc. in New York City, and Joseph Dillon & Co. in Great Neck, N.Y.
“If I had gotten into why I couldn’t talk about my past, it would have been misunderstood,” said Iavarone, who was never charged with criminal actions. “I was a 22-year-old kid who didn’t know what I was doing when I got censured. There were people who went to jail. I’ve learned my lesson and moved on from that life, and I don’t know how the mistakes I made 15 years ago are relevant now.”
Mr. Iavarone: Let me tell you why it's still relevant to me... I had a broker do this to me once, too, back in 2000. He was eventually charged with fraud by the legal department of the NYSE and disbarred for life. Never went to jail that I know of. The only reason I know is because the NYSE lawyer contacted me to ask if I would be willing to testify, which I was and did. The broker's defense? He had none. Cost to me? My entire inheritance. My mother wrote me out of her will in black and white when I was unable to return money that she had gifted me in a timely fashion because the broker took it out of the very safe money market fund I had placed it in and bought "callable" 10 and 15-year bank CDs with it. I had to fight one of the largest investment houses on Wall Street for more than three months to get my original investment back, never mind any interest, which I did return to her. Meanwhile, in that 90-day time frame, she changed her will and never undid it. She died a year later.
And they all think this is perfectly OK...
"But he never worked for Goldman Sachs, and in fact was fined and suspended for making unauthorized trades at the A. R. Baron & Co. brokerage firm. Iavarone conceded Wednesday that his Wall Street career consisted of selling penny stocks at A. R. Baron and three other firms — Lloyd Wade Securities Inc., Maidstone Financial Inc. in New York City, and Joseph Dillon & Co. in Great Neck, N.Y.
“If I had gotten into why I couldn’t talk about my past, it would have been misunderstood,” said Iavarone, who was never charged with criminal actions. “I was a 22-year-old kid who didn’t know what I was doing when I got censured. There were people who went to jail. I’ve learned my lesson and moved on from that life, and I don’t know how the mistakes I made 15 years ago are relevant now.”
Mr. Iavarone: Let me tell you why it's still relevant to me... I had a broker do this to me once, too, back in 2000. He was eventually charged with fraud by the legal department of the NYSE and disbarred for life. Never went to jail that I know of. The only reason I know is because the NYSE lawyer contacted me to ask if I would be willing to testify, which I was and did. The broker's defense? He had none. Cost to me? My entire inheritance. My mother wrote me out of her will in black and white when I was unable to return money that she had gifted me in a timely fashion because the broker took it out of the very safe money market fund I had placed it in and bought "callable" 10 and 15-year bank CDs with it. I had to fight one of the largest investment houses on Wall Street for more than three months to get my original investment back, never mind any interest, which I did return to her. Meanwhile, in that 90-day time frame, she changed her will and never undid it. She died a year later.
And they all think this is perfectly OK...
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Sock Monkey
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I saw this on Iavarone the other day, but I can't help think he fits right in with a lot of people in this business.
I'm not going to rush out and invest in his hedge fund, though.
You know, the last time I was at KEE I was checking out at the office and said "I guess you want me to pay you, right?" And, they said "no, you don't have to." Maybe Iavarone was told the same thing and took it literally!
(What they meant was that I had credit and they would invoice me, but I thought it was funny the way they said it.)
I'm not going to rush out and invest in his hedge fund, though.
You know, the last time I was at KEE I was checking out at the office and said "I guess you want me to pay you, right?" And, they said "no, you don't have to." Maybe Iavarone was told the same thing and took it literally!
(What they meant was that I had credit and they would invoice me, but I thought it was funny the way they said it.)One of the things I find unbelieveable about a story like this is that this guy STIFFS the horse business for over half a mil (Keeneland) and folks just fly by that and put millions back in his hand.
I'm going on faith here that Three Chimneys had no knowledge beforehand of Iavarone's character.
I'm going on faith here that Three Chimneys had no knowledge beforehand of Iavarone's character.
So Run for the Roses, as fast as you can.....
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Hold Your Peace
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None of this changes my being a fan of Big Brown or anything, and to be fair Iavarone made good on all past judgements and isn't under investigation for anything in the present, but it would be a warning sign if anyone were going to invest in the new IEAH hedge fund I would think.
I don't think Pompa and Three Chimney's have anything to worry about being somewhat partnered with him either.
In addition to this guy with a questionable (and in some instances fabricated) past being the one heading up this hedge fund idea I don't like the numbers I've seen tossed around of a 2% (of gross revenue?) fee plus 20% of all net earnings that Iavarone and partners would get for running it. The hedge fund idea sounds like it could leave a lot of very wealthy people very sour on Thoroughbred Racing and Breeding if they lost their rears on it because from the sounds of things most of his prospective investors are not knowledgeable about this business which leaves them ripe for getting "Padua'ed".
I don't think Pompa and Three Chimney's have anything to worry about being somewhat partnered with him either.
In addition to this guy with a questionable (and in some instances fabricated) past being the one heading up this hedge fund idea I don't like the numbers I've seen tossed around of a 2% (of gross revenue?) fee plus 20% of all net earnings that Iavarone and partners would get for running it. The hedge fund idea sounds like it could leave a lot of very wealthy people very sour on Thoroughbred Racing and Breeding if they lost their rears on it because from the sounds of things most of his prospective investors are not knowledgeable about this business which leaves them ripe for getting "Padua'ed".
I wouldn't invest anything with this guy.
I think the hedgefund idea is taking the racehorse "partnership" idea a little too far and trying to make it an investment vehicle. Look at any of the large partnerships - West Point for instance - They are more selling an experience than an investment - if the were selling an investment they would need some sort of SEC oversight. Won't IEAH need this? I think there have been a few racing partnerships that went public and failed miserably.
I think the hedgefund idea is taking the racehorse "partnership" idea a little too far and trying to make it an investment vehicle. Look at any of the large partnerships - West Point for instance - They are more selling an experience than an investment - if the were selling an investment they would need some sort of SEC oversight. Won't IEAH need this? I think there have been a few racing partnerships that went public and failed miserably.
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Hold Your Peace
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I'd hate to see potential new owners get soured on this business, and I'm very bothered by the misrepresentations and ommissions on the part of Iavarone either through statements on the IEAH website or articles referenced on the IEAH website.
One article stated Iavarone had a degree from UCLA when in fact his degree comes from what seems to be more of a community college - St. Joseph's with locations in Brooklyn and Long Island. Iavarone says the article was mistaken.
But to call himself a "Wall Street Investment Banker" is unquestionably a misrepresentation. His time on Wall Street was spent as a low level employee with firms that were the scum of the earth.
And then he himself says he spent a few years on his own as an "unsuccessful" day trader.
Apparently Iavarone is a heck of a smooth talker though as he was able to start IEAH largely due to an $800,000 investment from a "European High Risk Investor" he declined to identify.
This Bloomberg article had a few more details than the one previously referenced.
http://www.bloomberg.com/apps/news?pid= ... refer=home
And this one from NY Newsday.
http://mobile.newsday.com/detail.jsp?ke ... =ts&full=1
The only Wall Street Firms Iavarone worked for (all of them are out of business now):
A.R. Baron
http://www.nydailynews.com/archives/new ... s_lap.html
Lloyd Wade
http://www.usdoj.gov/usao/nys/pressrele ... tionpr.pdf
Maidstone
http://www.finra.org/PressRoom/NewsRele ... es/P010400
Joseph Dillon
http://www.sec.gov/litigation/opinions/34-43523.htm
And a Bloomberg commentary on Iavarone (different from their initial article):
http://www.bloomberg.com/apps/news?pid= ... qe8fxVGAq8
One article stated Iavarone had a degree from UCLA when in fact his degree comes from what seems to be more of a community college - St. Joseph's with locations in Brooklyn and Long Island. Iavarone says the article was mistaken.
But to call himself a "Wall Street Investment Banker" is unquestionably a misrepresentation. His time on Wall Street was spent as a low level employee with firms that were the scum of the earth.
And then he himself says he spent a few years on his own as an "unsuccessful" day trader.
Apparently Iavarone is a heck of a smooth talker though as he was able to start IEAH largely due to an $800,000 investment from a "European High Risk Investor" he declined to identify.
This Bloomberg article had a few more details than the one previously referenced.
http://www.bloomberg.com/apps/news?pid= ... refer=home
And this one from NY Newsday.
http://mobile.newsday.com/detail.jsp?ke ... =ts&full=1
The only Wall Street Firms Iavarone worked for (all of them are out of business now):
A.R. Baron
http://www.nydailynews.com/archives/new ... s_lap.html
Lloyd Wade
http://www.usdoj.gov/usao/nys/pressrele ... tionpr.pdf
Maidstone
http://www.finra.org/PressRoom/NewsRele ... es/P010400
Joseph Dillon
http://www.sec.gov/litigation/opinions/34-43523.htm
And a Bloomberg commentary on Iavarone (different from their initial article):
http://www.bloomberg.com/apps/news?pid= ... qe8fxVGAq8