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The Stolper Group is a boutique law firm founded by Michael Stolper, a former litigation partner at the international firm Orrick Herrington & Sutcliffe and associate at Donovan Leisure Newton & Irvine. 

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Hedge fund manager owes college friend of Trump Jr. millions of dollars, jury finds - ABC News

Particle Media

Hedge fund star Paul Touradji bilked a pair of employees, including a fundraiser for the Trump campaign, out of nearly $50 million, a Manhattan jury decided late Thursday.

Touradji had refused to pay Robert Vollero and Gentry Beach for three years’ worth of work and the jury awarded them a combined $45.7 million following a three-week trial.

Beach is a Dallas-based investor and college friend of Donald Trump Jr. who helped raise money for the Trump presidential campaign. He and Vollero were portfolio managers at Touradji Capital Management.

The jury found Touradji in breach of contract for an oral compensation agreement.

“This has been an 11 year battle for Vollero and Beach against what was once the largest commodities hedge fund in the world,” said Mike Stolper of Stolper Group, who represented the two men along with David Greenberger of Bailey Duquette.

“The jury’s verdict is justice for our clients,” Greenberger said. “It has now been proven that Touradji Capital failed to honor its compensation agreements with Gentry and Rob, and that they engaged in no wrongdoing whatsoever.”

Touradji Capital did not immediately respond to a request for comment but in closing arguments defense attorney Sean O’Brien said Vollero and Beach were entitled to nothing.

“A central question is whether these two men, Gentry Beach and Robert Vollero have proven to you that they entered into more than one binding agreement independently, which they were contractually entitled to be paid fixed percentages of profits and certain investment costs, while not having to worry or take into account any of the losses," O'Brien said. "The answer to that question is no.”

Former high-flying hedgie ordered to cough up $90M in bonus trial - New York Post

Particle Media

Time to cough it up, Paul.

After a decade of sensational courtroom allegations about his rough treatment of underlings — ranging from death threats to taunting a worker with his blingy new watch — hedge-fund mogul Paul Touradji will have to pony up as much as $90 million to two ex-employees, who claim he stiffed them out of years’ worth of bonuses.

During a two-week trial that wrapped up last month, lawyers for Gentry Beach and Robert Vollero said the notoriously brash founder of Touradji Capital Management was so livid over their demands for unpaid bonuses that he lashed out with language that would make the cast of Showtime’s “Billions” blush.

One staffer was so frightened that he filed a police report.

“I will not pay you, I will not pay you a dime, you know, and before this is done and over, your wife will be here in this office, here on her knees, begging for mercy,” Touradji ranted, according an Touradji analyst who was called to the witness stand.

“The final sentence was, ‘When I am done with you, you will never find a job on Wall Street again,’” the analyst told the jury.

During the tongue lashing, which was delivered in an “extremely unpleasant, loud, raging voice,” Touradji slammed the glass door to his Park Avenue office “so hard that the photographs — the pictures I had on my wall in my office — fell off,” the witness testified.

Later that afternoon, Touradji advised his rattled staff in an e-mail blast to “Run faster than me or be eaten” — a directive that even Touradji later admitted on the witness stand was “a pretty obnoxious quote.”

After the closed-door confrontation, Beach filed a police report later that day claiming his boss wanted him “killed” and telling cops he was “in fear of his safety,” according to a copy of the report.

“[Touradji] reminded me that I am just a puppet on a string, he controls the string, and is not afraid to cut it,” Beach wrote in a letter to the fund’s general counsel a day after the closed-door meeting.

“Most disturbingly, at one point toward the end of the conversation, he said that I better do exactly as I am told here at Touradji Capital or he would destroy me even if it meant he had to have me killed,” Beach’s letter continued.

The dustup happened in late September 2008. Lehman Brothers had collapsed a week earlier, spurring the financial crisis that sent markets tumbling. But Touradji — known for his well-timed trades in the commodities space — was riding high.

By the end of 2009, Touradji — one of the industry’s elite “Tiger Cubs” trained under legendary stock-picker Julian Robertson of Tiger Management — was listed by Forbes as one of the 20 highest-earning hedge fund managers, putting him in company with James Simons of Renaissance Technologies and John Paulson, who famously shorted mortgage-backed securities ahead of the housing crisis.

With $2.7 billion in assets at the time, Touradji earned a spot on Fortune’s “40 under 40” spread alongside up-and-comers like Google’s Sergey Brin and Larry Page, Facebook’s Mark Zuckerberg and Carl Icahn protege Keith Meister, who now runs Corvex Capital.

Fortune wrote of Touradji around the same time, also noting his reputation for having a “hot temper.”

At the time of Touradji’ s alleged office tantrum, it had been three years that Beach and Vollero had gone without the bonuses they say they were promised when joining the firm. The duo say they had been promised that they’d earn a portion of the fund’s profits and were shocked in 2007 when they still weren’t paid their full share.

They still went to work believing their payday would come and that a portion of their compensation had been reinvested in the fund, as Touradji claimed.

The pot amounted to as much as 15 percent of trading profits in the funds managed by Touradji Capital — or roughly $23 million each for the two.

Touradji took the witness stand and claimed he was the one threatened by Beach: “The guy came in, ‘If you don’t pay me, me and my dad are going to take the money. You’re going to be sorry,’” he said Beach told him.

It looks like the jury didn’t buy it. Touradji’s stumbling in the face of tough questions on the witness stand likely didn’t help — including a bizarre moment when he claimed he couldn’t identify his own face.

In that awkward exchange, Touradji was getting grilled about his alleged taunting of Beach by buying himself an expensive watch in the middle of their financial dispute.

According to Beach’s lawyers, Touradji first asked Beach, a known watch enthusiast, what kind of watch he would get if he had all the money in the world. A few days later, Touradji showed up to work with the same exact watch — a Patek Philippe — and made a point of flashing it in Beach’s face.

Touradji claimed he didn’t recall the watch story. When confronted with a photo of himself wearing the watch in a Fortune profile, he demurred.

“I don’t recognize this picture. It looks like me, of course,” Touradji said in court.

Jurors were shaking their heads with a look of disbelief, according to someone who witnessed the proceedings.

After just four hours of deliberations, a New York State Court jury found Touradji had indeed stiffed Beach and Vollero out of their $46 million in bonuses between them. Since the bonuses should have been paid more than a decade ago, Touradji is also expected to be ordered to cough up annual interest payments that would double the award to $90 million, said the lawyers for Beach and Vollero, including Robert Seiden of the Seiden Group, Michael Stolper of the Stolper Group and David Greenberger of Bailey Duquette.

“Our clients simply did not owe the plaintiffs anything more than the very significant amounts that they had already been paid,” Sean O’Brien, attorney for Touradji, told The Post, adding that he planned to pursue a new trial and an appeal if necessary.

Beach and Vollero looked dazed amid the prospect of their long-awaited payday when speaking with The Post the day after the verdict.

“You experience something like this. You live through it, and it’s over,” said Beach, who became close friends with Donald Trump Jr. as an undergrad at Wharton. The two men are godparents to each other’s children.

At one point, Vollero and Beach marveled how Beach’s first child — born within days of their start at Touradji Capital — is now 14 years old.

Since filing their suit, the hedge fund industry has changed. Though it manages an estimated $3.2 trillion — roughly double its size when Vollero and Beach left Touradji Capital — the industry doesn’t draw paying clients like it used to.

Many of the industry’s biggest names like Leon Cooperman, John Paulson and David Tepper have largely converted their shops into family offices — with Cooperman telling investors he doesn’t “want to spend the rest of my life chasing the S&P 500.”

Touradji Capital appears to be a shadow of its former self, managing roughly $215 million for nine clients out of Boca Raton, Fla., according to the fund’s most recent regulatory filing.

Beach and Vollero, meanwhile, have carved out a new niche for themselves focusing on private investments in emerging tech companies, farming and cannabis.

“We’re focused on things you can put your hands around,” Beach said.

Joshua Newman, a Fitness Entrepreneur, Sentenced to 41 Months in Prison

Particle Media

Joshua B. Newman, a Yale University graduate turned personal fitness entrepreneur, was sentenced on Tuesday to more than three years in a federal prison for bilking 30 investors out of more than $3 million.

Mr. Newman, 37, was sentenced just over two years after federal authorities had charged him with duping those investors, many of whom were either Yale alumni or people who had come to know him at a CrossFit training center in New York.

Judge William H. Walls of the Federal District Court in Newark imposed a sentence of 41 months followed by three years of court supervision, after Mr. Newman had addressed the court and said he was sorry for his actions.

A number of Mr. Newman’s family members were in the courtroom as were an investor who said he lived in Puerto Rico and a lawyer who represents several other investors.

“Josh acknowledged he came from privilege and he blew it,” said Michael Stolper, the lawyer who represents 11 investors. “I think justice was served.”

Mr. Newman’s business failures and allegations that he had failed to repay debts to investors were first reported by The New York Times in May 2015. He is scheduled to report to prison on Aug. 28.

“Although today’s sentence disappoints us, we have complete faith that Josh shall return to society as a true asset to his community,” said Priya Chaudhry, a lawyer who represented Mr. Newman along with Eric Kanefsky. “Josh is lucky to have many gifts, including resilience.”

Mr. Newman intends to repay his victims and has accepted full responsibility for his actions, Ms. Chaudhry said.

Raised in Silicon Valley, Mr. Newman graduated from Palo Alto High School in 1997, just as the first internet start-up boom was taking hold. At Yale, Mr. Newman majored in cognitive science, a field that combines elements of computer science, neuroscience and psychology. By his junior year, Mr. Newman has said, he was a managing partner in the Silicon Ivy Venture Fund, which provided seed money to start-ups backed by college students.

Even before he graduated, Mr. Newman was featured in an April 2000 article in The Wall Street Journal about dorm room venture capitalists. He seemed to have a bright future, but things went wrong when a small film production company he had started, Cyan Pictures, ran into financial trouble and accumulated big debts that would dog Mr. Newman for years.

He then tried his hand at CrossFit, an intensive workout regimen, and became an outspoken devotee. He was a founder of a large, independently owned CrossFit center in Manhattan.

But Mr. Newman got in trouble when he began raising money to finance another CrossFit center. Federal prosecutors contend much of the money he raised for that venture and others went either to his personal use or to the investors in his failed movie production company.

Mr. Newman is not affiliated with CrossFit Inc., a fitness consulting firm based in Washington. Centers using the CrossFit brand name are independently run.

Even after he pleaded guilty to one count of wire fraud in March 2016, Mr. Newman continued to posit himself as an entrepreneur. He created a website for a new fitness and training program called Composite Fitness.

And he continued to post messages on his blog. His last message was posted on Monday under the headline: “Penance.”

The brief post was a quotation from Joseph J. Ellis, the American historian and writer: “And the only thing to do with a sin is to confess, do penance and then, after some kind of decent interval, ask for forgiveness.”

 

A Yale Graduate Leaves a Trail of Ventures and Debts

Particle Media

In many ways, Joshua Bryce Newman fits the part of the young, successful entrepreneur.

A 35-year-old Yale graduate, Mr. Newman began investing in Internet start-ups during his junior year. After college, he ran an independent movie production company in New York and helped found two popular CrossFit gyms in Manhattan. His website cites several news articles that describe him as “a Silicon Valley pro” and “an Internet elder statesman,” and as being “sharp and supremely confident.”

But some of the nearly two dozen people who have either invested with Mr. Newman or lent him money over the last decade paint a less favorable picture. In lawsuits that have been filed against Mr. Newman or companies he controls, investors say that he has a history of bouncing checks, unpaid debts and misrepresented intentions.

While the total amount in dispute appears to be relatively small — roughly a few million dollars — the way Mr. Newman has managed to raise money easily from sophisticated businessmen, many with a track record of investing in Internet start-ups, is a vivid reminder of how the right connections and a strong sales pitch can seduce investors, even after the financial crisis.

The investors include a co-founder of a social messaging site that was acquired by Google and a founder of an online apparel company. They were typically introduced to Mr. Newman at a Yale event, in a casual meeting at the Sundance Film Festival in Utah or on the recommendation of someone in the close-knit community of so-called angel investors in technology start-ups.

Several investors, some of whom declined to speak on the record because of continuing litigation, said they had been reassured by Mr. Newman’s background and by favorable media coverage, including several articles in The New York Times. Due diligence can be an afterthought for investors in start-ups and independent movies, businesses in which failure is not uncommon. And indeed few said they had looked into Mr. Newman’s past by checking court records or lien filings before investing in his projects.

“Two people I know vouched for him and said, “He is a friend of ours and is cool,’ ” said Richard Webb, an angel investor and marketing consultant who lives in New York and has invested in technology start-ups including Circa, Foursquare and Percolate.

Mr. Webb lent $250,000 to Mr. Newman in 2010, and won a court-ordered judgment against him the following year when the loan was not repaid.

“He would do a lunch with me and try to make it all good,” Mr. Webb said. “He came up with a couple of thousand dollars in 2012, and then he disappeared.”

While lenders and investors describe a pattern of such behavior, Mr. Newman’s string of bad debts may simply be a reflection of poor business skills.

For his part, Mr. Newman said in an interview that he understood that his investors were upset, but he said that he had made a good-faith effort to repay some of them. He declined to comment further on the record, except to say that he was working on a plan to reimburse investors to whom he owed money.

“The sane thing would have been for me to bankrupt myself,” Mr. Newman said. “For seven years, I’ve tried to make everyone whole. It’s the morally right thing to do.”

On Monday, Mr. Newman made a $50,000 payment to Joshua A. Adler, a real estate investor who lent $100,000 in November to Outlier Capital, a small venture capital firm that Mr. Newman controls. In March, Mr. Adler, a Yale alumnus, sued Mr. Newman and Outlier in Delaware state court, claiming that Mr. Newman had defaulted on the loan and refused a request to repay it.

“Mr. Adler recently received a payment on behalf of Mr. Newman,” said John G. Harris, Mr. Adler’s lawyer. “That payment reduces, but does not satisfy, the amount in controversy.”

“The suit goes on,” he added.

Several investors said they were concerned that Mr. Newman was continuing to raise money for new ventures, including one that supposedly has an equity investment in the National Pro Grid League, a new association of teams that compete in various feats of strength in the United States.

In September, a lawyer for the eight-team league, which had its inaugural season last year, sent a cease-and-desist notice to Mr. Newman telling him to stop telling prospective investors that he was raising money for the league, according to documents reviewed by The Times. The documents also show that Mr. Newman told investors that he intended to raise an initial $5 million for the new sports league.

James Kean, chief executive of the National Pro Grid League, said that Mr. Newman was “not affiliated” with the league in any way.

The trail of litigation against Mr. Newman began with Cyan Pictures, an independent movie production company he founded in Manhattan in 2002. The company, which Mr. Newman started a year after graduating from Yale, bet much of its success on “Keeper of the Pinstripes,” a low-budget baseball movie based on a novel about the Yankees.

The movie was never made, though the rights to the project are still held by Samarian Productions.

By 2010, the financial problems at Cyan had begun to mount, court records show. It is not clear if Mr. Newman ever raised the $9 million that he had said would be needed to begin making the film. But his struggles to get the film produced prompted him to take out short-term loans — many of which he later defaulted on, court records show.

A few of the investors in Cyan have been paid back in full. Steven Voichick, a Georgia businessman, received nearly $500,000 in November 2014 after a court ordered Mr. Newman to pay in 2010. In late 2014, Mr. Newman also paid an old $350,000 debt to Nic Radkowsky, a Brooklyn artist who had provided a bridge loan to Cyan.

Raised in Silicon Valley, Mr. Newman graduated from Palo Alto High School in 1997, just as the first Internet start-up boom was taking hold. At Yale, Mr. Newman majored in cognitive science, a field that combines elements of computer science, neuroscience and psychology. By his junior year, Mr. Newman has said, he was a managing partner in the Silicon Ivy Venture Fund, which provided seed money to start-ups backed by college students.

The Wall Street Journal featured him in an April 2000 article about dorm-room venture capitalists. A number of other business publications, including Forbes, also wrote profiles of Mr. Newman.

Cyan was his first big endeavor. The firm produced and distributed a handful of small movies that were made on shoestring budgets, like “Coming Down the Mountain,” released in 2003.

But Mr. Newman’s big bet was the Yankees film, and he went to several Sundance film festivals to find prospective investors. The project floundered, however, as a dispute arose over whether the Yankees would cooperate. Cyan closed in 2011.

Investors, former employees of the company and the Screen Actors Guild, now called SAG-Aftra, all filed lawsuits against Cyan and Mr. Newman. In all, creditors and investors obtained judgments or filed claims totaling about $2 million.

The vice president for finance at Cyan was Alexander Chatfield Burns, who after the movie production company closed went on to establish a private equity firm, Southport Lane Management, that is now being scrutinized by insurance examiners. The Wall Street Journal recently reported that the firm transferred millions of dollars of insurance assets into potentially risky investments. It appears that Mr. Newman and Mr. Burns have not worked together since Cyan shuttered its operation.

Even as Cyan was trying to establish itself in the movie world, Mr. Newman was looking to reinvent himself. He entered a business partnership with three others in 2004 to open CrossFit NYC, a gym that focuses on extreme strength and conditioning programs used by police academies and military training units. Over the decade, Mr. Newman has appeared in three articles in The Times discussing the popularity of such training methods.

Still, the Cyan debts never went away.

Michael Stolper, a lawyer for seven people who put a combined $1.2 million into a CrossFit NYC investment vehicle, said that his clients’ money never went toward its intended purpose of expanding the business. Mr. Stolper said his investors, who intend to file a suit, are investigating whether Mr. Newman used the money to pay off some of his older debts.

Last summer, Mr. Newman’s partners, after learning that he had been accused of misleading investors, dismissed him from the company.

“Josh was fully divested of his interest in the company for cause,” Hari Singh, one of his former CrossFit NYC partners, said in an email. “Josh has no ownership, management or employee relationship with CrossFit NYC.”

Undeterred, Mr. Newman began raising money for a new fitness training company called Northstar CrossFit. He also began raising money for a venture called National Pro Fitness League Holdings, which he said had an equity stake in the National Pro Grid League, the upstart competitive fitness league.

Both these enterprises have drawn questions. Most of the people Mr. Newman hired for Northstar quit over concerns about his business practices, said Caroline Johnston Polisi, a lawyer for one of them. The National Pro Grid League says that it has had nothing to do with Mr. Newman for a year.

On Monday, the league sent a second cease-and-desist notice to Mr. Newman.

Judge puts hold on Dermot crane at 21 West End Avenue project

Particle Media

A Manhattan Supreme Court judge issued a temporary restraining order against Dermot Company, the developer of the planned 21 West End Avenue luxury tower.

The order was granted by Judge Marcy Friedman late last week after Dermot was sued by Atlantic Development Group. That company is seeking to block Dermot’s use of a tower crane on a privately owned street next to the Riverside South construction site.

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Former NHL player Bryan Berard and ex-cop help feds nail two Arizona men in massive fraud

Particle Media

Former NHL player Bryan Berard and ex-cop help feds nail two Arizona men in massive fraud.

A Brooklyn federal judge on Wednesday unsealed a 10-count grand jury indictment of a self-described "lifestyle coach" and a convicted cocaine dealer who authorities believe ripped off upwards of $15 million from a dozen or more current and former National Hockey League players and several Long Island police officers and their families.

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Stolper Group, LLP + RK Adler

Particle Media

Stolper Group, LLP partners with tech and start-up focused, RK Adler

The Stolper Group, LLP and RK Adler, a law firm that represents diverse technology start-ups, venture-backed businesses and emerging companies, in addition to offering non-legal related guidance on corporate development, announced a strategic venture to address the legal needs of NYC-based tech start-ups.