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November 1, 2007

Caught in the Double Act

By Spear's

Albert Hsu’s fall from grace was swift. The high-profile hedge fund manager returned to his mansion in toney New Cannan, Connecticut, one chilly Friday in March, was handcuffed and carted off to jail, where he has been held ever since on charges of attempted kidnapping and sexual assault. Word of Hsu’s arrest spread quickly through the financial community, with friends and acquaintances expressing shock that this seemingly upstanding citizen led what can only be called a double life: cub scout leader, philanthropist and successful financier by day, twisted, obsessed woman-hater by night.

While Hsu’s case is extreme, it got me to thinking about just how common it is for rich, super-successful men to have two, paradoxical personas. Take Bruce McMahan, the former president and CEO of wealth management firm Argent Financial Group, who was a well-respected money manager – until, that is, it came to light that he married his biological daughter. Needless to say, incest doesn’t go over too well with the average God-fearing American. And then there is the case of secretive billionaire Jeffrey Epstein, a close friend of Prince Andrew, who reportedly manages $15 billion for wealthy clients. He repeatedly claimed in interviews that he was a homebody who never touched alcohol or drugs. Well, in his defence, Epstein never did claim not to touch underage girls. His downfall came when one of his adolescent assistants outed him as a fan of ‘kinky massages’. The case continues.

Then there was the case of the pillow-talking porn star Kathryn Gannon, otherwise known as Marilyn Star (her films include Penis Envy, Vols. One & Two) who was regularly given insider-trading tips (from which she made some $80,000) by her sometime lover James McDermott, a former chairman of Wall Street investment bank Keefe, Bruyette & Woods. In return for a smorgasbord of kinky sexual favours, McDermott gave the former porn star advance merger information about regional banks, which were represented by his Wall Street firm. McDermott – who I am told by friends was a typical Wall Street ‘happily married’ charmer of the Sherman McCoy school – was found guilty on six counts of insider trading.

Such headline-grabbing cases notwithstanding, not a week goes by when I attend a cocktail party or fundraiser and there isn’t some hedge fund mogul who shows up with someone other than his wife dangling off his arm. While the age-old practice of adultery doesn’t cause most New Yorkers, including this one, to bat an eye, it never ceases to amaze me how bold these men are when it comes to flaunting their mistresses. After all, this is the holier-than-thou USA, where wives demand respect, not the Old World, where dalliances are considered an after-dinner sport.

So how does one explain this brazen behaviour? Are powerful, successful men simply more sex-crazed than the average Joe? Or is collecting women just another asset for these men to manage? One recent survey, Money as an Aphrodisiac: Being Rich Means Getting Lucky on Your Own Terms, suggests that the well-heeled are indeed more sexually active than the general population. In short, the richer you are, the luckier you get; although acquiring an appetite for sexual adventure, kinky role-play, domination and risk certainly doesn’t always end well. One of the best examples of the deeply troubled financier double-life syndrome is the case of Edouard Stern. When the body of the 50-year-old French financier, dressed in a latex rubber catsuit, was discovered in the bedroom of his Geneva penthouse a few years ago by his Portugese housekeeper, Stern’s murder became pretty much the only dinner-party conversation in Europe’s secretive high finance and hedge fund circles. Stern was married to the daughter of one of France’s richest men, Michel David-Weill, CEO of Lazard, although he had spent the night with his French mistress, an artist and former expensive vice-girl. Stern had been shot four times in a professional style that suggested a contract killing, or an assassination – a premeditated killing, as the French prefer to call it. Move over Roberto Calvi, the ‘Pope’s banker’, found hanging off London Bridge.

Stern spent a lot of time in New York – although based in Geneva – and was certainly on familiar terms with many leading figures on Wall Street, as well as the priapic womaniser Sir Jimmy Goldsmith, who famously once said: ‘When you marry your mistress, you create a job vacancy’. Like many financiers, Stern’s fragile sexual ego was indulged by an obsession with killing things. Usually driven pheasants and partridge, but also bears, buffalo and wild boar. He was a fanatical shot and was often seen flying out of Geneva’s airport on a Friday night in his private jet with a triple set of Holland & Holland guns, dressed up like a GQ advert, to enjoy weekends with fellow Euro-set financiers and hedge fund managers at some of the very best shoots in England and France.

At the level of high finance in which Stern worked, the major players operate like the members of a private club. What goes on behind closed doors always remains private. One reason Stern had so many enemies is that he seemed to enjoy flouting the rules and humiliating others. Although not yet a billionaire himself, Stern certainly behaved like one – that is, he thought himself above bourgeois morality when it came to satisfying his exotic sexual cravings – and thought it his natural right to be one of them.

While such examples of Darwinian adventurousness come as no surprise, I thought it would be fun to ask some hedge fund managers today if their peer group was particularly prone to straying from the marital bed. Recently, while at an invitation-only hedge fund conference in Las Vegas, chaired by real estate tycoon Steven Wynn’s son-in-law, Peter Early, ten of us were sitting in a private dining-room, sipping Sake and nibbling on caviar and yellow fin tuna, when I managed to steer the conversation from the depressing topic of Iraq to what for some seemed to be the even more depressing topic of fidelity. One gentleman jumped at the chance to pontificate.

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‘The way I see it, the institution of marriage was created at a time when people only lived to be 35, so they didn’t have to put up with each other for ten, twenty, 30-plus years,’ said the handsome portfolio manager in his forties who, for the sake of his wife and dear children, shall remain nameless. Needless to say, I wasn’t surprised when later that evening I spotted that same man locking lips with one of Sin City’s finest specimens on the floor of the swanky nightclub Tryst.

OK, so the rich are gifted in the art of scoring, but what they seem to be particularly bad at is being scorned.

Just four days after Hsu’s arrest, I attended the World Hedge Fund Summit in Greenwich, Connecticut. There I bumped into an old acquaintance of mine, who happened to know the now-disgraced Hsu. Ironically, this hedge fund manager, who is married with children, had earned the moniker ‘Stalker’ on my caller ID, yet he apparently felt self-righteous enough to condemn Hsu’s actions.

‘What a sicko,’ said the faux-family man.

‘Yes, it’s amazing how someone can seem like such a nice man, and turn out to be such a sleazeball,’ I said, looking him directly in the eye.

When I first met Stalker at an industry networking event, he too seemed perfectly respectable, telling me about how his wife was a great cook and how much fun he had taking his teenage son on a college tour in upstate New York. Later that evening, out of the blue, this squeaky clean Father-of-the-Year boldly tried to put his hand up my skirt. Needless to say, I slapped it away and told him that my husband really wouldn’t appreciate that. You would think that he got the hint, but no, he continued to call, saying he wanted to buy me a present for my new office. I’m pretty sure he was speaking in euphemism.

While Stalker’s inability to understand rejection was no more than a nuisance for me, sadly for Hsu it cost him his business and, most likely, his freedom. Hsu is now facing 30 years in prison for impersonating his ex-girlfriend on a bondage website, posting her address and travel schedule, and writing that she had a fantasy of being raped, kidnapped and doubtless sodomised for good measure. So what happened to Stalker? Well, I caved in and let him buy me a top-of-the-line stapler that would make any office-assistant green with envy, but I drew the line at the $800 Herman Miller chair.

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