Courtesy of Pam Martens.
Andrew Caspersen
There were a lot of sweaty palms on Wall Street yesterday. As the Government Accountability Office released a report suggesting that regulation of Wall Street is a complex maze of inefficiency and fragmentation leaving gaping holes in which crooks can find fertile ground, the U.S. Justice Department was perp-walking a 2002 Harvard Law School graduate (whose family name resides on the student center there) on charges reminiscent of a Bernie Madoff startup.
According to the unsealed complaint from the U.S. Justice Department’s regional U.S. Attorney’s Office for the Southern District of New York, 39-year old Andrew Caspersen, whose father and grandfather were the former heads of Beneficial Corp., is alleged to have defrauded approximately $24.6 million from a charitable foundation by setting up a fake account, transferring $17.6 million of that amount to his “personal brokerage account” at an unnamed brokerage firm, then churning the hell out of options on the S&P 500 Exchange Traded Fund (SPY), which racked up losses of $14.5 million. What else Caspersen traded is not mentioned, but the complaint notes that as of December 31, 2015, his personal brokerage account had a “net loss of approximately $25 million.”
Caspersen Student Center at Harvard Law School
The Justice Department is calling this a $95 million fraud because on top of the $24.6 million that was defrauded from the charity, Caspersen attempted to obtain “an additional $20 million investment from the same charitable foundation and a $50 million investment from another multinational private equity firm headquartered in New York,” ostensibly to cover up the first fraud in a Ponzi like operation when the charity demanded its first $25 million back. Caspersen failed to obtain the additional sums.
The sweaty palms on Wall Street stem from the fact that some very big names are involved here. While the fraud was taking place, Caspersen was a managing director at PJT Partners Inc., whose largest shareholder is Blackstone Chief Executive Stephen Schwarzman. PJT trades on the New York Stock Exchange and the shares tanked yesterday on the news of Caspersen’s arrest, initially dropping as much as 24 percent before closing down a little over 10 percent.
…
