Thursday, March 26, 2015

NYU's Michael Steinhardt, Wall Street and Golan Heights Oil Connection: Part 4

NYU Trustee Steinhardt’s Vietnam War Era Hedge Fund Firm

NYU Trustee Steinhardt apparently made a lot of money during the Vietnam War Era after he, Howard Berkowitz and Jerold Fine established a Wall Street private investment/hedge fund firm they named Steinhardt, Fine and Berkowitz & Company in July 1967. In his 2001 book, No Bull, Steinhardt indicated how his partnership of Wall Street hedge fund speculators apparently made its profits during the Vietnam War Era:

“…Hedge funds generally charge a management fee of 1 percent to cover overhead and expenses, plus a percentage of the profits [of their clients’]—in our case and conventionally, 20 percent…By the end of fiscal 1969 [during the Vietnam War Era], Steinhardt, Fine, Berkowitz & Company, had almost $30 million in capital…In 2 short years, still in our late twenties, Jerry and I had become millionaires…Our biggest success came with King Resources, a company whose story was vast oil and gas discoveries…We made about 5 times our money in a few months…Because I was at the center of…trading information, I gained a competitive advantage…We were often accused of `running ahead’—trading on the knowledge of buyers and sellers that the block traders provided…In 1969, a trader needed to sell 700,000 shares of Penn Central, a large railroad…I bought 700,000 shares at 7…I turned around and sold the 700,000 shares at 7 ¾ to a buyer at another firm…I made more than a half million dollars on a trade that took all of 8 minutes…Marc Rich…became an investor and then a good friend of mine…”

Coincidentally, a Mar. 9, 2001 article by Josey Ballenger, titled “Marc Rich inquiry highlights strange bedfellows,” on the Center for Public Integrity’s website contains the following reference to NYU Trustee Steinhardt’s “good friend,” Marc Rich (who died in 2013):

“Buried in the furor over former President Clinton's pardon of Marc Rich is the role the fugitive commodities trader played in supplying oil to South Africa's apartheid government, in violation of international sanctions against the racist regime…The billionaire Rich, who fled to Switzerland in 1983 to escape tax evasion and other U.S. criminal charges, was South Africa’s biggest supplier of oil (and traded other commodities with the pariah country), contravening U.S., European Community and OPEC embargoes and amassing millions of dollars… Rich headed the list of oil suppliers to South Africa, according to the Shipping Research Bureau, an Amsterdam-based watchdog that monitored sanctions-busting commodities trading from 1980 to 1993…An apartheid-era official from the Strategic Fuel Fund—South Africa’s oil procurement agency—confirmed in a recent interview that the former government traded directly with Rich, sometimes through front companies. The SFF considered Rich to be its most reliable supplier during the boycott, said the official, who asked not to be named.

Rich was indicted in 1983 on more than 50 counts of tax evasion, fraud, racketeering and trading with the enemy. The Justice Department charged that he evaded more than $48 million in taxes (the largest tax fraud case in U.S. history)…Rich’s companies paid $200 million in criminal fines and penalties in 1984 in connection with the case, but he was not tried as an individual.”

(end of part 4)

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