NYT shines some sunlight on the worst of Wall Street

The NYT has been all over Wall Street lately: criticizing its product offerings (SPACs), mocking its hedge fund managers (too arrogant), trashing a well known mutual fund manager (excessively piggish).

If the NYT reports are accurate, we are not a pretty lot. While its tough to objectively label someone as too arrogant or piggish — these are such visceral emotional issues — the Times does not paint a pretty picture.

Consider these three tales:

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Mario Gabelli is revealed as an overpaid fund manager, and gets trashed as a greedy majority shareholder who treats his minority shareholders exceedingly poorly.

Litigation to follow . . .

•  A Noted Poison Pen Starts a Hedge Fund Hiring Showdown
Daniel S. Loeb runs the $3.6 billion hedge fund Third Point, and the NYT rakes him over the coals. Since I don’t know the man, I cannot attest to how accurate/fair the Times piece is; they seem to go out of their way to paint him as a pompous ass.

Citadel comes in for the wrecking ball also, with the NYT pointing out their unusual managment fee fluctuate, running as high as 6% (the typical hedge fund management fee is 2%).   

Crave Huge Risk? This Investment May Be for You
SPACs: The latest Wall Street product are expensive and risky — but the tradeoff is that most are unlikely to succeed.

My experience is that Wall Street is filled with both heroes and goats, with pigs and weasels. While the Times is focusing on the seamy underside as of late, I know too many Wall Streeters who are conscientious, charitable, humble fellows.

Indeed, several firms dedicated a day of trading profits to Katrina victims (Cantor, Jeffries & Co, Rob Fraim, etc.). And of course, Todd Harrison’s Investing Rock Stars Guitar is a terrific charitable venture.    

I guess for every Bull there’s a Bear, and for each of them there’s a pig . . .


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  1. Catablast! Media Group commented on Sep 28

    Don’t forget the less-scathing article on Loeb (who is also known as “Mr. Pink” on the SiliconInvestor.com message boards) in this month’s Bloomberg Markets magazine.

    Highly recommended.

  2. spencer commented on Sep 28

    Is the NYT now going to try to offset its poor coverage of Bush by attacking business?

  3. royce commented on Sep 28

    The biggest problem for Wall Street is that it’s impossible for the consumer to tell the difference between heroes and scumbags. To the outsider they talk the same, look the same, and often act the same (who is all good or all evil, after all). There’s all these nice advertisements about how this or that manager is looking out for your money and wants to make you wealthy- but when you look beneath the surface you often see a scheme which is far more likely to make them rich than you. So as you can imagine that makes for some bad PR on occasion.

    I can’t see the problem with the Times banging up Wall Street a little. It’s not like it’s going to change anything there.

  4. erikpupo commented on Sep 28

    Is anyone watching the hammering that Fannie Mae stock is taking?

    What exactly is going on there?

  5. LB commented on Sep 28

    More accounting problems…via DowJones



  6. jz commented on Sep 28

    I was waiting on this, its like the tipping point has just passed and the consumer is falling hard.


  7. Barry Ritholtz commented on Sep 28

    Mind you, I am not suggesting that the Times is wrong — its just that I just found the flurry of these stories all at once to be . . . intriguing.

    These are all big boys, and if there is anything amiss, they know what to do.

  8. brian commented on Sep 29

    Barry, it is legal permissible for the above cited firms to donate a day’s worth of profits to Katrina victims? Would not that violate their fiduciary responsibility to their investors?

    I doubt they contacted each and every shareholder and got approval. Even if they did, why not just donate a portion of their management fees to Katrina instead of taking money from trading profits?

  9. Barry Ritholtz commented on Sep 29

    The Bean counters write it off as advertising/PR.

    The public firms spend 10s of millions per year on Print and TV; A days trading profits are insignificant (1 of 250), genertae good will, etc.

Read this next.

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