Usually talking – and this isn’t certified monetary recommendation – it is just about all the time higher to take a position your cash reasonably than lit it merely sit within the financial institution incomes pennies in curiosity. Placing your cash to work can usually result in growing it, and over time, you possibly can see these investments double, triple, and even grow to be ten occasions their unique price.
After all, not each funding is a sound one. Typically, you do not uncover that till the underside falls out from beneath you.
And if you happen to’re actually unfortunate, you would possibly spend money on maybe the three most notorious fraudulent ventures of all time. That is what occurred to New York oil baron Robert Belfer. A person who has hit for the cycle within the dangerous funding triple crown.
Sean Zanni/Patrick McMullan by way of Getty Photographs
Robert Belfer is the son of Arthur Belfer, who fled Poland throughout World Battle II and based Belco Petroleum Corp. The enterprise grew right into a Fortune 500 firm, and Robert Belfer finally took it over.
By the mid-Nineteen Eighties, Belco Petroleum merged with InterNorth, Inc., which later merged with Houston Pure Fuel. That merger led to the creation of Enron.
On the peak of their energy within the Nineties and 2000s, the Belfer household owned roughly $2 billion price of fairness in Enron. That was sufficient to be considered one of Enron’s largest non-institutional stakeholders.
Sadly, as you doubtless know, Enron’s executives have been illegally hiding large money owed from buyers and collectors, and the corporate finally declared chapter. It was the most important chapter in US historical past as much as that time. Tragically, that $2 billion fairness stake reportedly went to ZERO.
After the Enron fiasco, the Belfers made the seemingly secure and good move to take a position a wholesome chunk of their remaining household fortune with a wealth advisor named… Bernie Madoff.
As you doubtless now know, Bernie Madoff was secretly working the most important Ponzi scheme in historical past. The Belfers withdrew greater than $28 million from Madoff’s fraud throughout their time as buyers. Within the wake of his arrest and claw-back lawsuits, the Belfers have been sued by Irving Picard, who was in command of liquidating Madoff’s property to try to recuperate the funds of different victims.
Unbelievably, the Belfers’ dangerous funding luck didn’t cease with Madoff.
It has lately been revealed that two of Belfer’s corporations, Belfer Funding Companions and Lime Companions LLC, held shares in each FTX and its United States subsidiary, FTX US. These shares have been price $34.5 million as of early final 12 months.
As you now know, FTX collapsed in a matter of days final November and has been working its approach by means of chapter whereas the agency’s former CEO Sam Bankman-Fried faces a litany of felony fees.
If Belfer can take any solace over this newest failed funding, it is that he isn’t alone in being blinded by the FTX mild. Tom Brady and his ex-wife Gisele Bundchen had practically 1.8 million mixed frequent shares of FTX. A number of different celebrities additionally purchased into the FTX buzz at numerous ranges.
Belfer has a number of philanthropic endeavors, too, often donating to the Metropolitan Museum of Artwork and a number of medical establishments. These charitable tax deductions would possibly particularly come in useful this 12 months.
Even after the chaos of Enron, Madoff, and FTX, the Belfers aren’t in dire monetary straits. Nonetheless, these are three robust tablets to swallow, irrespective of how a lot cash you’ve got!
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