There is an updated SEC complaint out with respect to the alleged financial mismanagement of client accounts at former high-flying technology fund Amerindo. It is stupendously (accent on the “stupe” part) fascinating, if only because of the amazing apparent high-handedness of Amerindo principals Tanaka and Vilar.
For example, there was the time Vilar told a client that he had put her $5mm (that she wanted back) on deposit with the SBIC, and, sadly, he wouldn’t be able to return the money just that moment. (Note: The SBIC doesn’t take capital on deposit.) And then there was the $12mm that the client had in other Amerindo accounts. While she asked for that money, Vilar deployed what should henceforth be called the “Panama gambit”. He wrote a letter telling the client’s lawyer that the redemption request would have to made elsewhere — like Panama:
The Investment Management Agreement requires that the client notify the office where the account is lodged of its decision to terminate its service in writing. [L.C.] should write a letter to the Amerindo office where she has been a client for the better part of 20 years, which is: Amerindo Investment Advisors, Inc., Calle Elvira Mendez, Vallarino Building, 6thFloor P.O. Box 4415, Panama 5, Republic of Panama. She can also send a signed copy of this notification to the London office, which coordinates administration.
Amazingly brazen stuff. Read the whole thing though; it’s valuable and cautionary stuff.