Looking for the Crumbs
at
CRUM & FORSTER
Sightings from The Catbird Seat
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From their website:
Crum & Forster Holding Inc., a wholly owned, indirect subsidiary of Fairfax Financial Holdings Limited, provides insurance products and services through eight companies:
- United States Fire Insurance Company
- The North River Insurance Company
- Crum and Forster Insurance Company
- Crum & Forster Indemnity Company
- Crum & Forster Specialty Insurance Company
- Seneca Insurance Company, Inc.
- Seneca Specialty Insurance Company
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Nicholas Antonopoulos
Chairman and Chief Executive Officer
Nick Antonopoulos is Chairman and Chief Executive Officer of the insurance operating subsidiaries of Crum & Forster Holdings Corp.
Nick has over 20 years of experience in the insurance industry including 13 years at American International Group, Inc., where he held various senior management positions in National Union Fire Insurance Co., AIG's financial lines subsidiary, and AIG's domestic brokerage group.
In 1995, Nick left AIG to form his own insurance consulting business before joining Marsh & McLennan Capital Inc. in 1996 as a principal.
Nick is a graduate of Pace University where he earned a B.B.A.
Steven Cohen's ex-wife dished to FBI
By KAJA WHITEHOUSE, New York Post
Hedge-fund billionaire Steven Cohen's ex-wife Patricia Cohen alerted the FBI of his alleged trading shenanigans more than two years before filing her explosive lawsuit accusing him of profiting from nonpublic information as far back as 1985, The Post has learned.
According to sources familiar with the matter, Patricia in 2007 contacted FBI Special Agent B.J. Kang about the same suspicious activities she detailed in the lawsuit she filed earlier this week.
Sources said Kang interviewed Patricia Cohen at her home on the Upper East Side, where she recounted her story of her ex-husband knowing about General Electric's 1985 purchase of RCA before the deal was publicly announced.
Patricia Cohen later spoke with Kang's supervisor, FBI Supervisory Special Agent Patrick Carroll, according to a source with knowledge of the situation.
Cohen was interviewed by the Securities and Exchange Commission about trades tied to the GE-RCA merger, but he pleaded the Fifth, according to the lawsuit.
On Wednesday, Patricia, who's been split from Cohen for 20 years, shocked Wall Street when she filed a federal lawsuit against Cohen accusing the 53-year-old hedge-fund king of cheating her out of millions in their divorce proceedings and admitting to have traded on confidential information.
Cohen, through a spokesman, has denied his ex-wife's charges.
The FBI declined to comment about Kang speaking with Patricia Cohen.
Patricia's attorney, Paul Batista, also declined comment.
Sources said Patricia contacted Kang after she read a published story that mentioned Kang in relation to Canadian insurer Fairfax Financial Holdings, which had accused more than a dozen hedge funds, including Cohen's SAC Capital, of manipulating the company's stock. Cohen was never charged in the Fairfax case.
Kang has been at the center of a number of high-profile criminal cases involving Wall Street. He's currently head of a widespread insider-trading probe that has already ensnared more than 20 people, including executives from high-profile companies like IBM and law firm Ropes and Gray, sources tell The Post.
He was the FBI agent who took Galleon Group boss Raj Rajaratnam away in handcuffs after he was busted on insider-trading charges, and was involved in the criminal case involving Ponzi schemer Bernie Madoff.
Fairfax files huge stock
manipulation lawsuit
VANCOUVER, British Columbia, (Reuters) - Fairfax Financial Holdings Inc. said on Wednesday it had filed a multibillion-dollar lawsuit against a number of defendants, including hedge fund SAC Capital Management and its billionaire founder, Steven Cohen.
The complaint, filed in New Jersey Superior Court, alleges defendants participated in a stock market manipulation scheme involving Fairfax shares.
Fairfax, a Toronto-based property, casualty and life insurer, said in a press release that the suit was for $5 billion, though in the lawsuit filing it said it was seeking no less than $6 billion in compensatory damages plus punitive and treble damages for "egregious misconduct.".
The suit alleges the defendants prepared "a massive and fraudulent disinformation campaign attacking Fairfax and other targeted publicly traded companies" using "biased, negative" analysts reports, and then made money by shorting the stock.
The scheme called the "Fairfax Project" began after Fairfax's stock was listed on the New York Exchange in December 2002, according to the lawsuit.
SAC, widely viewed as one of the most successful hedge fund groups, denied the allegations.
"The allegations are without merit and SAC will defend itself vigorously," a spokesman said.
The fund is already the focus of a lawsuit over short-selling allegations by Canadian biotech company Biovail Corp.
Among the other defendants in the Fairfax lawsuit are Exis Capital Management Inc., Lone Pine Capital LLC, Rocker Partners LP, Copper River Partners LP, Third Point LLC, Trinity Fund Ltd., and Morgan Keegan & Co. Inc.
Third Point declined comment on the lawsuit, while efforts to reach Rocker and other defendants for comment were not immediately successful.
Fairfax alleges the defendants "threatened, harassed and sought to intimidate" its high-level executives and their families, and spread false stories, such as one that said Canadian police were pursuing its chief executive for fraud.
December 31, 2004
Viking Insurance Company
Of Wisconsin
HISTORY AND CAPITAL
History
In 1971, the Company was incorporated as a multiple line insurance company in the State of Wisconsin as “Viking Insurance Company.” In 1973, its name was changed to the current name, “Viking Insurance Company of Wisconsin.” The Company was originally controlled by the directors, their families and employees through an employee stock ownership trust.
In 1982, all of the outstanding stock was purchased by Crum and Foster, Inc., a New York holding company and a subsidiary of the Xerox Corporation. As a result of an organizational restructuring in 1993, the Company’s stock was contributed to a newly formed holding company, Viking Insurance Holdings, Inc. (Viking Holdings), a Delaware corporation, which was a wholly owned subsidiary of Talegan Holdings, Inc., a Delaware corporation (formerly known as Crum and Foster, Inc.).
Talegan Holdings, Inc., is a wholly owned subsidiary of Xerox Financial Services, Inc., a Delaware corporation, which is a wholly owned subsidiary of Xerox Corporation, a New York corporation.
In 1995, Guaranty National Corporation (GNC) (now OrionAuto, Inc.) acquired Viking Holdings. In 1997, the Company became a direct subsidiary of GNC, after Viking Holdings was dissolved.
In 1999, the Company redomesticated from the State of Wisconsin to the State of Colorado.
With the approval of the Colorado Division of Insurance and other concerned jurisdictions, Royal & SunAlliance Insurance Group plc (RSA) purchased Orion Capital Corporation and all of its subsidiaries, including OrionAuto, Inc., on November 16, 1999. RSA is an international insurance group, which writes most of the major classes of property, casualty and life insurance.
During the examination period, Royal & SunAlliance USA, Inc., implemented a “Fleet Consolidation Plan” to reduce the number of insurance companies within the holding company system. The reduction to the number of companies within the holding company system, following receipt of regulatory approvals, occurred through a series of mergers and other transactions that were effective December 31, 2004.
The Company remained a direct wholly owned subsidiary of OrionAuto, Inc., a holding company domiciled in Colorado....
http://www.dora.state.co.us/insurance/finexam/viking04.pdf
July 21, 2003
The Most Powerful Trader on Wall Street
You've Never Heard Of
By Marcia Vickers, Business Week Online
Meet Steve Cohen. Even his enemies admit he's the best stock trader around, routinely trouncing the market with his $4 billion hedge fund. Just how does he do it?
A gunmetal-gray BMW 745 Li sedan slips out of Steven A. Cohen's 14-acre walled estate. The chauffeured car races along the winding backcountry hills of ultrawealthy Greenwich, Conn. At around 8 a.m., it powers into the parking lot of SAC Capital Advisors. Cohen quickly emerges and darts into the front entrance of his gleaming steel and terra-cotta-slabbed Stamford (Conn.) headquarters. His driver swings the car around to the back and parks in a space with a simple reserved sign amid a sea of testosterone-exuding cars belonging to his traders: Mercedes S600s, Lexus sport-utility vehicles, and Porsche Carrera 4s.
Cohen will soon be sitting at what one trader calls "command central" -- his desk with its numerous screens, perched in the midst of a football field-length trading floor. In the next few hours he is likely to earn several million dollars.
Cohen, 47, is the most powerful trader on Wall Street you've never heard of. The founder of SAC Capital Advisors, a highly secretive and stupendously successful $4 billion group of hedge funds that bears his initials, is considered to be a market genius by even his harshest critics. His firm routinely accounts for as much as 3% of the New York Stock Exchange's average daily trading, plus up to 1% of the NASDAQ's -- a total of at least 20 million shares a day.
And while most of his rivals struggle to keep their trading costs down, "Stevie," as he's known on Wall Street, is one of the few to pay full freight. He hands over about $150 million a year in commissions to Wall Street, making him one of its 10-largest customers.
The payments grease the superpowerful information machine that Cohen has built at SAC. The firm's credo, says a former SAC trader, is to "try to get the information before anyone else." The torrent of commissions wins Cohen the clout that often makes him privy to trading and analyst information ahead of rivals....
For instance, SAC was a big beneficiary of allocations of red-hot initial public offering shares during the Internet boom, according to several former SAC traders.
Cohen manages less money than hedge-fund titans such as George Soros or Julian Robertson did at the height of their powers, but his sheer trading prowess leaves them in the dust. At the heart of his empire are 40 "portfolios." Each has between one and 15 traders and analysts who execute various strategies. The primary focus is a long-short equity strategy, but more recently the firm has branched out into convertible and statistical arbitrage, quantitative strategies, and big bets on interest rates. Investors' money is channeled through seven different "portfolio companies" or funds -- including a core fund, a global diversified fund, and a health-care fund, each with an offshore counterpart. One fund, Sigma, consists mainly of his personal money, say insiders...
But Cohen's reach, and power, extend well beyond the seven funds. The billionaire, who earned an estimated $128 million last year and $428 million in 2001, according to Institutional Investor, has a finger in funds other than his own. Top SAC traders have contracts that contain provisions giving Cohen the right to fund up to half their capital if they leave to start their own funds, as many have done. He sometimes gets more favorable terms than other investors, such as being able to pull out his money early....
So is the fear Cohen inspires on Wall Street. Says a trading executive at a brokerage house: "It's great if you're in the Stevie camp that day or that month. But he can turn against you in the blink of an eye and redirect his capital somewhere else if he gets pissed off."
Few of the several dozen people -- including former and current employees, other hedge-fund traders, Wall Street analysts, and proprietary traders -- that BusinessWeek interviewed over a three-month period would speak on the record about Cohen or SAC. Cohen, who's "almost as secretive as Howard Hughes," according to one source, declined to be interviewed or photographed. An insider describes him as "incredibly camera-shy and publicity-averse." He requires employees to sign dense confidentiality agreements. SAC officials would not comment on the record for this story....
Cohen's single-minded focus puts enormous pressure on SAC's 200 or so traders and analysts. "If you can't cut it within a few months of starting, Stevie will blow you out like that," says a former trader, who says he was fired for losing a substantial amount in one trade. Another says he left to escape the "ulcers and night sweats" he suffered while working there. SAC traders, who often earn $2 million-plus, are paid according to what they make on their individual trades, not on the overall performance of the fund, as at most hedge funds.
"You eat what you kill," says one former trader. Adds another: "At SAC, you either perform or you're dead."
Earlier this year, the Securities & Exchange Commission launched a wide-ranging investigation into the $500 billion hedge-fund industry, including whether some of its practices represent conflicts of interest. "Few hedge managers are out-and-out fraudsters, but there are no doubt thousands who have convinced themselves that crossing some lines is O.K.," says Randy Shain, president of BackTrack Reports Inc., a business investigator.
BusinessWeek didn't turn up any records of disciplinary action against Cohen or SAC by regulators at the SEC or the National Association of Securities Dealers....
Because he practices what a former SAC trader calls "active trading on steroids," there's little doubt that Cohen and his traders are very aggressive in seeking an edge.
On Dec. 27, 2001, the day after ImClone Systems (IMCL) Chief Executive Samuel D. Waksal found out that the Food & Drug Administration had rejected an approval application for the company's cancer drug, Erbitux, an SAC trader named Jason Bonadio was one of a handful of investors to call Waksal that day.
Former traders say SAC noticed a price movement, though the news wouldn't be publicly released until the next day. Domestic diva Martha Stewart placed her now infamous call to Waksal 17 minutes after SAC's, according to Waksal's phone log obtained by a congressional committee investigating ImClone.
Sources familiar with the firm say Bonadio's call was forwarded to ImClone's investor relations department and never returned. SAC lost "millions" on a long position on ImClone, they say. Bonadio, who has left SAC, declined to comment.
Recently, the whispers about how Cohen and SAC operate evolved into full-fledged buzz. In January, one of SAC's star traders, Michael Zimmerman, came under SEC scrutiny for allegedly trading on information in company reports written by his wife, Holly B. Becker, a noted Lehman Brothers Internet analyst, before they were published.
Both Becker and Zimmerman were served in late January with Wells Notices -- documents warning of a possible civil action by the SEC relating to stock trading. Their lawyers declined comment.
Sources familiar with the company say SAC is not under investigation by the SEC. They add that if anything untoward occurred, it took place before Zimmerman joined SAC. Because Zimmerman still works at the firm, the affair has brought a great deal of unwelcome publicity to the fund and Cohen himself.
BusinessWeek has learned of a situation that has the appearance of a conflict of interest. Glenn Tatarsky, a trader at Sigma, one of Cohen's funds, had been actively trading the stock of retailer American Eagle Outfitters Inc. in 2001 and 2002. He was then living at the same address as Kindra Devaney, a retail analyst at Fulcrum Global Partners, who is now his wife. At the time she was negative on American Eagle. On Jan. 28, 2002, she issued the only "sell" rating among the 21 analysts then covering the company, according to Bloomberg Financial Services.
BusinessWeek found no evidence that she ever shared information with Tatarsky about American Eagle before publishing her report or that he traded on anything he heard from her. However, he did buy stock on each of the three days leading up to Devaney's sell recommendation, sources familiar with the matter say.
Either way, the incident raises questions about how SAC handles potential conflicts of interest when employees trade stocks that their partners analyze at other firms. Sources familiar with the company say it has one of the most stringent codes of conduct in the industry. Fulcrum's CEO Michael C. Petrycki says: "We were unaware of the situation, but our policy prohibits only immediate family from trading stocks we cover."...
Cohen's home life seems a far cry from the frenzied pace of SAC. He met his wife, Alexandra, who grew up in the Bronx and is described by a friend as "dark-haired and pretty in a petite way," through a dating service after divorcing his first wife. "From the time she was a child, Alex always said she wanted to marry a millionaire. She struck out," jokes a family friend. "She got a billionaire." Cohen has seven children and stepchildren.
In 1998, the Cohen family bought a 30-room Greenwich mansion built in 1930 for around $15 million. It was quite a move up from their previous $2 million house. They put millions of dollars more into an elaborate renovation and extension, say friends....
Cohen may not be impressed by his own billions, but Alex has coaxed him into "lavish entertaining, round-the-world art-buying trips, white-gloved butlers, that sort of thing," says an old acquaintance. For a housewarming party, she sent out an invitation she thought of herself: a deck of playing cards with a photograph of Steve as the king in a velvet robe and crown, herself as the queen, the children, and various and sundry household help as other cards.
Still, friends say Alex is a driving force behind the Cohen's generous charitable giving. In 2002, they gave $15 million to the Robin Hood Foundation, a charity founded by hedge-fund icons Paul Tudor Jones II and Stanley Druckenmiller. And they've given millions to aid families of World Trade Center victims and funded a walk-in clinic at Greenwich Hospital, among other activities. Cohen is also on the board of the Michael J. Fox Foundation, a nonprofit that fights Parkinson's disease.
The flow of charitable donations isn't likely to dry up anytime soon. SAC is having yet another good year, by most standards. But those 14% gains may not be setting well with Cohen. No doubt he wants to return to his mammoth 40%-plus gains. That may explain, in part, why he has branched out into multiple strategies recently. Indeed, in the wake of Wall Street scandals and the increased scrutiny of analysts, SAC is trying to live down its barracuda-like image. It recently hired a public-relations firm to assist it.
"They know the spotlight is on them and they're really trying to clean up their act," says a former Sigma trader.
Cohen's active trading is now mainly focused on the firm's core fund that he manages. He continues to prune back the amount of capital he trades -- making the fund a lot more nimble -- while at the same time expanding his palette of trading strategies.
Says a rival hedge-fund manager: "He seems to be trying everything to get that old magic back."
Not that Stevie ever really lost it.
SECURITIES & EXCHANGE COMMISSION
Form S-4
Crum & Forster Holdings Corp.
Filed February 24, 2004
Investments in affiliates...
(dollars in millions) Carrying Value
Zenith National Insurance Corp $92.5 $107.7
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MORE TO COME
For more buzzards of a feather,
GO TO
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AIG: THE UN-AMERICAN INSURANCE GROUP
THE BUZZARDS IN THE HALLS OF SMU
THE EAGLE HOODED: THE 9-11 COVERUP
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DIRTY MONEY, DIRTY POLITICS & BISHOP ESTATE
Part I - Part II - Part III - Part IV - Part V - Part VI
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MARSH & MCLENNAN: THE MARSH BIRDS
NESTS OF THE INSURANCE VAMPIRES
MORE OF THE CATBIRD’S FAVORITE LINKS
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Originally posted July 6, 2006
Last Update December 21, 2009