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 Andrew Caspersen, who had worked at PJT's Park Hill Group since
2013, was named in a criminal complaint filed in federal court in
Manhattan, charging him with securities fraud and wire fraud.
Prosecutors said Caspersen, 39, sought $24.6 million from a
charitable foundation affiliated with a New York hedge fund along
with $400,000 from one of the fund's employees, saying he would
invest it in a secured loan to a private equity fund.
Instead, Caspersen used the money for personal options trading,
losing $14.5 million in the process, authorities said. Other funds
went to cover up unauthorized wire transfers at his company, the
complaint said.
The fraud, which involved creating fake email addresses and a
misleading domain name, began in July and continued through this
month, when he sought $20 million more from the foundation and $50
million from a private equity firm, prosecutors said.
During this time he worked at Park Hill, which he joined in 2013.
The advisory firm was spun out of private equity group Blackstone
Group LP in October. It is now part of PJT Partners, founded by
veteran dealmaker Paul Taubman.
Shares in PJT closed down 10.62 percent on Monday, after dropping as
much as 24.3 percent to a record low earlier in the day on news of
the charges.
"Looking at it from the outside, it looks like it was just a bad
apple as opposed to some kind of a systemic problem," said Jeffery
Harte, an equity analyst at Sandler O'Neill + Partners LP. "But I
suspect people will ask how do we know this won't happen again."
PJT said it was "stunned and outraged" by Caspersen's actions and
said it fired him. Both it and Blackstone said they were cooperating
with authorities.
Caspersen was arrested on Saturday and released on a $5 million bond
following a court hearing on Monday, where a prosecutor argued that
his wealth should require bail to be set even higher, at $20
million.
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A graduate of a Princeton University and Harvard Law School,
Caspersen is the son of Finn M.W. Caspersen, the former chairman of
consumer finance company Beneficial Corp, which Household
International Inc bought in 1998.
The elder Caspersen committed suicide in 2009 amid an Internal
Revenue Service investigation. In court, Assistant U.S. Attorney
Cristine Magdo said his net worth once was $1 billion.
Magdo referred to that wealth along with stolen funds that continue
to be unaccounted for in arguing Caspersen could pose a flight risk.
But Daniel Levy, his lawyer, played down those claims and said his
father died in debt.
"There's no secret pot of money Mr. Caspersen has access to and can
tap into," he said.
Caspersen, who Levy described as "a daily alcohol user," was ordered
by U.S. Magistrate Judge James Francis to seek mental health
treatment in light of what Levy referred vaguely to as recent
"thoughts." Levy declined comment outside of court.
(Reporting by Nate Raymond in New York; Editing by Dan Grebler and
Andrew Hay)
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