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e Bad News for Jeff Epstein? - Mergers, Acquisitions, Venture Capital, Hedge Funds ...

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## More Bad News for Jeff Epstein?

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INDUSTRIES



It was just about a year ago that Jeffrey Epstein, the reclusive financier, was being charged with soliciting prostitutes in Palm Beach, Fla. He may now have another image problem on his hands.

BusinessWeek reports that Mr. Epstein’s Virgin Islands-based money-management firm, Financial Trust Company, is listed in a filing with the Securities and Exchange Commission as a stakeholder in Bear Stearns's High-Grade Structured Credit Strategies Enhanced Leverage Fund, which became much easier to refer to in recent weeks as “Bear Stearns’ collapsing hedge fund.”

It is a tantalizing nugget of information about someone who rarely discloses anything about his business or his billionaire clients. Despite his penchant for privacy, Mr. Epstein runs in prominent circles: he once flew former President Bill Clinton on his 727.

Regulatory filings show that Mr. Epstein's firm had voting power over 10 percent of the equity in the Bear Stearns fund, which, aided by loans from some of Wall Street's biggest banks, bet heavily on the securities linked to the market for subprime mortgages, or those to homeowners with weak credit histories.

As the subprime mortgage market has been rocked by a rise in defaults, many of those bets have gone bad. As of the end of April, the Bear fund was down 23 percent for the year.



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http://deelbook blogs nytimes.com/2007/07/11/more-bad-news-for-jeff-epstein/



7/13/2007
EFTA00188327


More Bad News for Jeff Epstein? - Mergers, Acquisitions, Venture Capital, Hedge Funds ...

Page 2 of 3





http://dealbook blogs nytimes.com/2007/07/11/more-bad-news-for-jeff-epstein/



7/13/2007