Daily Archives: March 29, 2010
Last asking price was $29 million, so presumably it’s selling for less than that. 74 acres, great old house, I loved this place. But hardly surprising it took a couple of years to sell – even in Greenwich, that’s a lot of money, and the house was unusual enough to require an out-of-the-ordinary buyer. Guess one showed up.
This time it’s Robert Moffat, a former rising star at IBM. A strange case: the man was reported to be on track for the highest positions, the secrets he passed on netted him no gain and he didn’t trade on the information himself, so why did he do it? If I read the article right, he’ll have 3-6 months of downtime to figure it all out.
Putin has spent years brutally trying to suppress it, the Chechens respond in kind and on and on it goes. Not only does the author hold out little hope for a resolution, she points out that the 2014 Olympics are scheduled to be held right in the heart of the area. Those are probably games better watched from the comfort of your living room.
One I don’t necessarily share but if Greenwich Time doesn’t want Teri Buhl’s output, I’m grateful to have it.
What the NY Mag story didn’t tell you about Stevie Cohen v. Mrs-Ex SAC
By Teri Buhl
Today we learned that the secretive hedge fund manager from Greenwich, Stevie Cohen of SAC Capital, whose trading prowess is legendary, is not so good at managing his family life. According to a New York Magazine article, he plays an underhanded game of mental abuse to control the people in his family. Steve Fishman’s two month investigation into the lives of Steven (the billionaire hedgie), Alex (current wife), and Patricia (ex-wife) Cohen gives us an on the record account of the domestic financial battles of the Cohens over the last twenty years. Unfortunately, the New York Magazine story left out some very important facts in their tale of all things Cohen that we know were discovered in their research and not reported.
At the heart of this story are the dollars paid to Patricia for child support and household expenses for the children as part of her divorce settlement. We found the explanations of these numbers, as reported in New York Magazine, are not what they appear to be. First of all let’s be clear: it’s the current wife Alex who reigns over monitoring the payments to Stevie’s ex-wife Patricia and signs the check. A move Alex relishes and lords over like the mad Queen in Alice In Wonderland, because according to Patricia, reimbursement payments were often challenged as unnecessary or not related to the children.
Take a look at this example in Fishman’s story:
In 2001, Alex wrote checks to Patricia totaling $576,950, though the average annual payment, including child support and all other expenses, was closer to $400,000 while her kids were at home, according to documents. Of course, however generous the sum, it was no hardship for Steve. In 2001, Steve earned $428 million, according to Institutional Investor.
That sounds like a lot in a year and makes you question what Patricia has to complain about. Except according to documents seen by this reporter, that sum also included a $200,000 loan that Alex and Stevie had given Patricia with 7% interest with a 12% late fee penalty. Patricia ended up paying back the loan within months and Steve and Alex made $13,000 on interest. Also the $576k sum included household and kids expense for 2-3 years, not just one. Patricia’s attorney told this reporter that on average Patricia was only reimbursed around $125,000 a year for expenses she had already had to spend on the children including college tuition, room, and board, which otherwise not be paid on time by Alex and Stevie.
Patricia told this reporter, “I have never once, submitted a reimbursement request for any expense that was either explicitly stated as Steve’s obligation per the terms of our agreement that address child support, or an expense that fell outside of those outlines, that Steve did not specifically approve in advance of the expenditure.”
The worst part is according to Patricia’s current lawyer, Gaytri Kachroo, principal at Kachroo Legal Services P.C., these facts and loan documents were presented to Fishman for his story but clearly were left out. This makes us seriously question what other facts Alex and Steve manage to massage in the story.
Kachroo told this reporter, “We reluctantly agreed to respond to questions in the New York Magazine story around the children’s expenses as they are irrelevant to Paricia’s divorce settlement. But we did provide documented evidence so that the issues that arose concerning reimbursements where accurately detailed. However I see very little evidence of the information we supplied.”
When we asked Fishman, the writer, why factual information was left out of his story he only responded asking what publication I was writing for and did not supply an explanation. Fishman did tell Kachroo that parts of the story were cut by the editor because of space –A reason we find journalistically irresponsible. There was a clear effort to write both sides of the story so why leave out those facts?
But that’s not the only missing link New York Magazine chooses not to tell the reader. There is an implied tone that after the divorce, Patricia never even bothered to try and work and earn money for herself. Yet according to Patricia she continued doing real estate deals for the first ten years after her divorce in which she’d buy properties, fix them up and sell them for a profit. Alex Cohen is quoted in Fishman’s story wondering to a friend “Why didn’t she get a job?” Yet Alex knows full well that Patricia did work and also that she’s been plagued with a chronic illness for the last 10 years.
In an interview with Patricia, she described months of hospitalization over problems with her pituitary gland. Her chronic illness affects her thyroid and kidneys, a medical disease that comes without warning and can place her in the hospital for months. According to Patricia’s attorney, Stevie’s divorce settlement covers her health insurance for life but since 2001, her illness has made it difficult for Patricia to work. In fact of the $9,000 monthly payments she gets from Stevie today, only $2,500 is left over for travel to see the kids, for groceries and household expenses she must still supply as the children live with her some of the time, and other health related costs given her illness: $3,500 goes to her son, $1,500 for health insurance, and $1,500 for rent in an apartment Stevie owns. But none of this was explained in the New York Magazine story. According to Patricia, Alex and Stevie even tried to downplay Patricia’s illness when Fishman asked them about it saying ‘Patricia has allergies.”
Now as Patricia is about to re-file her civil RICO suit against Stevie for allegedly fraudulently concealing from her the true value of their marital assets during their divorce, some media reports and commentators label her as a money grubbing ex-wife who keeps going back to the well because she can’t manage money. Others cheer her for standing up to the powerful multi-billionaire who can squash her with legal fees and cut off her only source of funds. When I asked Patricia why Stevie doesn’t just settle with her and avoid the public battle, one that’s only added to the suspicion that he’s been avoiding taxes and running insider trades for years she simply answers, “We would probably have to start to talk for that to happen.”
[Editors Note: Teri Buhl is an investigative financial news reporter who has written for: Trader Monthly, New York Post, HousingWire, Dealbreaker, Greenwich Time ]