The strange case of the convicted hedge fund manager who faked his own death before he was supposed to report to jail has taken another turn. His lady friend is a squealer.

Samuel Israel III, has officially been deemed a 'not dead' fugitive by authorities after they found his abandoned SUV on a bridge over the Hudson River with the message 'Suicide is Painless' scrawled in dirt on the windshield. After his body never washed ashore and authorities realized his 'dirt note' was actually the TV theme song of M*A*S*H, the hunt for the man on the run began.

First stop: Sammy's girlfriend, Debra Ryan. After 10 days of interrogation she revealed that the day before he disappeared, she had assisted him in packing all his worldly possessions into an RV and dropping the vehicle off at spot not too far from his 'death site'. Turns out he also packed with him his blue 2005 Yamaha scooter. Nice! Chalk another one up for Vespas/scooters being smart. Use #56: Save Gas and Look Cool While On The Run From The Law!

I hope this whole fugitive thing ends in a slow speed chase with Sammy on his scooter on some Upstate NY highway. After the jump - silly aliases and crappy police work.

Ms. Ryan, the worst gf ever, is listed as a 'decorator' by trade and now faces up to 10 years in prison for aiding and abetting her boyfriend's flight. (I'm guessing she's probably an 'interior decorator'. Have you ever noticed there are no 'exterior decorators'? More house painters, landscapers, and maybe ever architects should start calling themselves that, adding some jazz to their title.)

Probably the best little bit of info that was revealed today was about Israel's fugitive 'aliases' from the New York Times article:

The marshals said the public should be on the lookout for Mr. Israel in “R.V. parks, campgrounds or highway rest areas,” and added that he had been known to use the aliases of Sam Ryan and David S. Clapp.

Mr. Israel suffers from severe back pain, according to court records, and has had a long battle with an addiction to prescription painkillers. At the time of his disappearance, he was scheduled for the latest in a series of operations on his spine.

Sam Ryan? Somebody likes his female New York sports reporters a lot. But what about 'David S. Clapp'? Could this be a reference to some possible battle with gonorrhea in the 80s? Only time will tell I guess.

Authorities should have realized sooner that because of Israel's horrible back pain, that suicidal jump off a bridge into the Hudson River would have been hell on him. Shoddy police work, if you ask me.

If you see fugitive Sammy Israel cruising around the East Coast in his RV or on his Yamaha scooter this weekend, be sure to leave a note in the comments section. I'm pretty sure the police will be monitoring it.

NYT: Fugitive Fund Manager's Girlfriend Is Charged, June 20, 2008

Last week we explained the bizarre case of the stockbroker who threw a hedge fund manager into a wall because the hedgie was being overly boisterous and obnoxious during a spin class.

The case was brought to court for charges of misdemeanor assault. Both sides' attorneys surmised this decision would decide whether it was justified to assault an annoying jerk for acting like one. So did it?

The New York Times ran an interesting piece on the widespread reaction to this trial. According to the NYT, many favored Mr. Carter (the assaulter, pictured) over the loudmouth, Mr. Sugarman (the assaulted):

“Don’t know Chris Carter, but can we give him a medal?” an anonymous commenter wrote to Dealbreaker.com, an attitude-laden blog about Wall Street goings-on. Another commenter described Mr. Sugarman as someone who “shoots off his mouth, ignores requests, then tattles like a little girl when he gets thumped.”

A writer named Curt Schleier sent us an e-mail message making a similar point. “Go to jail?” he said. “I think Carter deserves a medal.”

Mr. Carter, he said, had a “Network” moment: “This was just Carter’s way of sticking his head out the window and yelling, ‘I’m not going to take it anymore.’ ”

Mr. Schleier had an interesting angle on this sorry episode, which he called “a small part of a much larger issue.”

“Many Americans have an increasing sense of entitlement,” he said. “That is, what they want to do is more important than anyone else.”

Our own WSF readers agreed as well. Commenter 'Bluedog' said: "Great article. I vote Not Guilty. There's nothing worse than a loud baffoon in the gym. I wish more would regulate like the stockbroker did."

While one 'anonymous' commenter pointed out: "Just heard on the news that when Sugarman was asked to be quiet, he responded: "MAKE ME!" This guy is awesome!"

The New York Times wants to make these actions significant of a vast cultural phenomenon, by saying:

EXAMPLES of the phenomenon abound. An outsize sense of entitlement — coupled with an indifference to others — helps explain the drivers who barrel through crosswalks with no regard for the pedestrians with the right of way.

It helps explain ballpark loudmouths who couldn’t care less if those around them may be offended by their drunken swearing. It helps explain people who push their way into crowded subway cars before riders already in the cars can exit. It helps explain those who answer cellphones during a movie, or who take infants to the theater and then don’t leave when the babies start crying. It helps explain dog walkers who block sidewalks with their long-stretched leashes.

But isn't this really a case of two arrogant jerks butting heads? This kind of thing is bound to happen in an environment as hostile and high-pressed as New York City. In addition, these guys were both working on Wall Street during a major collapse in the market. Tempers were certainly high, so maybe you should be able to get away with more in that kind of situation? A little violent confrontation during spin class can be just swept under the rug.

Looks like the court saw things the same way we do. After six jurors deliberated for 2 days, Carter was declared Not Guilty yesterday.

New York Times: When Guys and Grunts Get Tangly, June 3, 2008

Wall Street Journal: The Gym Grunter's Confronter Walks!, June 3, 2008

The case of the stockbroker who threw a hedge-fund manager into a wall during a stationary bike workout has finally made its way to court with all its unbridled aggression and hilarity.

The initial incident took place on Manhattan's Upper-East Side during August of 2007 at an Equinox gym. Both Christopher Carter, a 44-year old stockbroker with Maxim Investment Group, and 48-year old hedge-fund manager, Stuart Sugarman, were part of the same vigorous 'spin class'.

Carter claims that Sugarman was shouting loudly to 'pump himself up' and began annoying everyone in the class. He continued by grunting and yelling 'You go girl!' and 'Great song!', while spinning. As Carter's attorney explains, when he yelled at Sugarman to quiet down:

"You will hear how Mr. Sugarman was boorish, was obnoxious, used obscenities, gave my client the finger," defense lawyer Michael Farkas told the jury.

In what sounds like typical grade-school behavior, Carter resorted to asking the spin class instructor to tell Sugarman to quiet the F down. When it was revealed the instructor was powerless to help, Carter lost his cool. He jumped off his bike, went over to Sugarman and flipped him backwards off his bike and into a wall. Supposedly there was a large hole left in the sheetrock from the impact.

(Sugarman after his hospital stay)

(Carter, the alleged assailant. Could he look more evil?)

According to the report in the NY Post:

The resulting herniated disc sent the fund manager, Stuart Sugarman, 48, to a hospital for more than a week - complete with surgery and metal screws in his neck, prosecutors said yesterday during opening statements in the misdemeanor assault trial.

The assailant, Carter, and his attorney are claiming in court that Big Sugar is faking the whole thing. He apparently proceeded to get on his bike and complete the spin class for additional 40 minutes of exercise after 'the brawl'.

Sugarman's attorney agrees that her client was annoying, but also claims:

"As New Yorkers, you've all been annoyed by someone," the prosecutor said. "Someone who's being rude. What's not normal . . . is to punish them by assaulting them."

I hope this trial gets a lot of media attention. And not just those crappy artist renderings of court scenes, but a full-blown reenactment/dramatization of the incident and a hyped-up episode of Law and Order.

Maybe one day we will look back at this case as the landmark decision that allowed people to beat up the annoying assholes who bother them?

DealBreaker: Spinning Out Of Control Because The Guy Next To You Won't Pipe Down-- A-Okay?, May 28, 2008

NY Post: Showdown Over Vicious Cycles, May 28, 2008

The Kentucky Derby might soon become more than just getting drunk and screaming at animals, because betting at the track just got a hell of a lot easier, and riskier too.

Picking the winner at the Kentucky Derby this Saturday could earn you some winnings, but for the guys owning those horses stand to make millions from their investment.

International Equine Acquisitions Holdings allows you to own a stake in not just one horse, but a full portfolio of potential winners. It works like a hedge fund.

You invest with IEAH, they use your money to breed, feed, and promote their stable of horses, and if any of those ponies turns out to be a big winner, you could be counting a lot of money. So far 100 investors have contributed over $1 million to the fund.

To make things a little more legit, IEAH also owns and operates an equine hospital that will open this year to care for racehorses. This hospital part of the fund would bring in and maintain some semblance of steady revenue.

Skeptics of this whole idea say it's bogus because you can't predict revenue. There's no way to know how much you could expect to win depending on how the horses place. It's may not be worth the added risk and slim chance of payoff.

According to an article in the Louisville Courier-Journal, IEAH principal founder Michael Iavarone said:

"As long as we're within the law … I don't care what people think whether it's a good idea or it's not."

This does not sound like a guy who should be managing racehorse money. Really, his only defense to the obvious potential flaws in his business plan is 'as long as it's legal we're going for it'.

I mean, yeah, it would be great if these horses won and you got a ton of money, but how's that any different than just placing a single bet?

Terrible idea or brilliant strategy? Think the favored 'Big Brown' can win it? What's your favorite Mint Julep recipe? Let us know in the comments.

Louisville Courier-Journal: Racehorse hedge fund considered, May 1, 2008
CNBC Sports Biz: Hedging Horse (video), May 1, 2008

While everyone fell blindly in love with risky mortgages and housing over the past few years, one guy bet against it all and won big.

John Paulson earned $3.7 billion last year. That's a pretty impressive number alone, but when you take into account that almost everyone else lost huge amounts of money in the market, it makes you think this guy is a genius.

Paulson, a hedge fund manager and founder of the Paulson & Company hedge fund, took a good look at the state of the financial universe in 2005 and didn't like the way things were headed. When many of the big banks were slicing and dicing risky sub-prime mortgages to get substantial sales, he saw the whole thing was headed for a major collapse. He realized then what we are unraveling now. When thousands of potential home-owners easily get approved for mortgages they can't afford, someone is going to pay for it. The New York Times explains exactly how he did it:

Paulson began betting that complex mortgage investments known as collateralized debt obligations would decline in value, much as Wall Street traders bet that shares will drop in price. In that case, known as shorting, they borrow shares and sell them, wait for the price to fall, buy the shares back at a lower price and return them, pocketing the profit.

To put it simply, hedge funds are very into this short-selling strategy where they 'bet against' a certain stock or bond, hoping it will fail. Paulson bet that a whole industry would fail and put up mucho dinero covering that bet. It paid off. Big time.

The key to this guy's success was realizing that the bubble was going to burst soon. He could have drank the Kool-Aid and invested in mortgages along with everyone else. He probably would have made some good money at the time. But when Paulson went against the grain and held steady on it, he was writing his own legacy.

New York Times: Wall Street Winners Get Billion-Dollar Paydays, April 16, 2008