I have a savvy-investor friend who jokes that he shorts stocks of the company whose CEO is featured on the cover of Forbes magazine each month.
Along those lines, this Wall Street Journal ($) article from February 2004 highlighted the comeback of lavish lifestyles and spending on Wall Street after a period of relative poverty after the bursting of the late 1990’s stock market bubble. The article included this excerpt:
A year ago, Bret Grebow, a 28-year-old who runs hedge fund HMC International, was taking cheap flights on JetBlue Airways and keeping a lid on his spending. But his fund’s investment portfolio surged nearly 40% last year, and Mr. Grebow says he’s confident that the market has regained its footing. So two months ago he bought a new $160,000 Lamborghini Gallardo. He says it was his first “treat” in months.
These days when Mr. Grebow and his girlfriend travel between his Highland Beach, Fla., home and his New York office, he charters a catered plane with a bar, paying as much as $10,000 for the three-hour flight. Last weekend he spent more than $12,000 to fly himself and some friends on a Learjet 55 to the Super Bowl.
“It’s fantastic. They’ve got my favorite cereal, Cookie Crisp, waiting for me, and Jack Daniel’s on ice,” says Mr. Grebow.
Fast forwarding to today, this NY Times article reports the Securities and Exchange Commission filed a lawsuit yesterday in New York accusing Grebow and his HMC cohort Robert Massimi of operating a Ponzi scheme that bilked investors out of more than $5 million without actually trading on their behalf. The SEC press release on the complaint is here.
Is it just me, or is anyone else surprised that investors give large sums of money to a 28 year-old who drives a Lamborghini Gallardo and publicizes that he eats Cookie Crisp cereal while drinking Jack Daniel’s?