MiB: Bill Browder on Finance, Murder and Justice

 

This week, we speak with Bill Browder, who is head of the Global Magnitsky Justice Campaign and author of the recently released “Freezing Order: A True Story of Money Laundering, Murder and Surviving Vladimir Putin’s Wrath.” The founder and CEO of Hermitage Capital Management, which was the investment adviser to the largest foreign investment fund in Russia until 2005, Browder is also the author of “Red Notice: A True Story of High Finance, Murder and One Man’s Fight for Justice.” His most recent book is “Freezing Order: A True Story of Money Laundering, Murder, and Surviving Vladimir Putin’s Wrath.”

We discuss the beginnings of his career at Solomon Brothers, whose cutthroat culture led him to hunt for overlooked sources of potential investment profits. In the era after the Berlin Wall came down, this led him to eastern bloc countries, first Poland, then Russia.

He launched Hermitage Capital Management in Moscow, Russia, and began analyzing and accumulating Russian companies. He discovered an immense amount of corruption, with the oligarchs who were running these still partly state-owned companies helping themselves to assets and capital on an immense scale. His approach was a “naming & shaming” campaign, where he would take a position and then publicize the graft in the Western media. Frequently, the oligarch running the company was fired by the (then) newly elected President of Russia, Vladimir Putin. The interests of Hermitage Capital and Putin appeared to be aligned.

Browder came to realize that in Russia, people believe everything is a conspiracy and nothing is as it seemed. The Oligarchs looked at him assuming, “There’s no way that some guy from the South Side of Chicago — some American — can just show up in Russia and take on the most powerful and dangerous oligarchs of his own volition.” It was obvious somebody much more powerful must be standing behind this. Many concluded this was a brilliant strategy by Putin to consolidate his power and cleverly gain control over the most valuable companies in Russia.

All of this went south once Putin had gained full control over Russia. Hermitage Capital was raided; Browder’s attorney, Sergie Magnitsky, was arrested, jailed, tortured, and then murdered in police custody.

Browder sought justice for this violent crime, eventually driving the United States and 30 other countries to pass the Magnitsky Act. The Global Magnitsky Act of 2016 authorizes the U.S. government to sanction foreign government officials worldwide who are deemed to be human rights offenders, freeze their assets, and ban them from entering the U.S.

A transcript of our conversation is available here Tuesday.

You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with Eric Balchunas, Senior ETF Analyst for Bloomberg, where he is co-creator of the Bloomberg podcast Trillions, and co-host of Bloomberg TV’s ETF IQ. He has authored several books, most recently “The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions.”

 

 

 

 

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