Dreier To Be Freed, But With Target On His Back

Feb 13 2009 | 3:50am ET

A federal judge has given his approval for Marc Dreier to be freed on bail, but he has warned the accused fraudster to watch his steps.

U.S. District Judge Jed Rakoff made clear that his Feb. 8 order setting out the disgraced lawyer’s bail terms—which include house arrest and $10 million bond—does not prohibit Dreier’s guards from using “lethal force” to prevent an escape. Dreier is expected to soon be released from federal custody, and into the custody of his 34th floor Manhattan apartment.

Dreier is accused of defrauding investors, including several hedge funds, of more than US$400 million. Yet he will have to pay for the armed guards—totaling some US$200,000—who will question any visitors and remove all communications equipment save for a landline telephone from Dreier’s East 58th Street home.

Court filings this week offered a glimpse of who Dreier was allegedly swindling: Twenty institutional investors, including several high-profile hedge funds. Among them are Amaranth Advisors, which spectacularly collapsed in 2006, Blackstone Group’s GSO Capital Partners, Concordia Advisors, Context Capital Management and Perella Weinberg Partners. Other hedge funds have been previously revealed as Dreier victims, including Elliott Associates, Eton Park Capital Management and Sandell Asset Management.

What’s more, Dreier’s downfall began with his arrest in Toronto in December, for allegedly impersonating another lawyer at a meeting with Fortress Investment Group.

Meanwhile, further details of that meeting are emerging. Dreier was allegedly attempting to sell phony promissory notes that he claimed were issued by BCE Inc., Canada’s largest phone company, and was backed by the Ontario Teachers’ Pension Plan, the Globe and Mail reports.

Dreier has been charged in Canada with impersonating a OTPP lawyer at the meeting. He allegedly tried to sell some C$52 million (US$41.7 million) in notes to a hedge fund, presumably one managed by Fortress.

Selling fake promissory notes seems to have been Dreier’s modus operandi. U.S. prosecutors say he sold more than US$100 million in discount notes he claimed were issued by prominent New York real estate developer Sheldon Solow to a pair of hedge funds.


In Depth

Fundraising for Mid-Sized PE Funds: Should You Use a Registered B/D?

Dec 6 2016 | 7:18pm ET

When does a fund sponsor need to use a registered broker/dealer when raising capital...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

A Hard Look At Your ‘Soft’ Hedge Fund Marketing Information

Dec 8 2016 | 9:03pm ET

Conventional wisdom holds that due diligence examines quantitative as well as qualitative...

 

From the current issue of

Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information. 

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR