Archives for October 2012

Guynn Update: Mormon Wife Quits Big Law Lawyer Accused of Mistress Assault

UPDATE 10-19-12: King & Spalding confirmed this morning Guynn is no longer with the firm. Although Steven hasn’t updated his twitter profile that promotes himself as “a partner at a pre-eminent law firm in New York City, who has led more than $150 billion of global transactions”.

Original Text
The Big Law lawyer, Steven Guynn, who was arrested for allegedly hitting his New Canaan mistress is getting divorced. Guynn, a practicing Mormon and long time New Canaan native, made international headlines this March after Jeannette Schaefer convinced the New Canaan police she was a victim of multiple domestic violence assaults by Guynn and then got him arrested. Guynn was charged with third-degree assault, second-degree threatening, and interference with a 911 call. At the time of Guynn’s arrest I was told his wife of 20+ years, Kristie Guynn, was standing by him and Guynn denied he assaulted his mistress. After the arrest, I published an investigative story on Schaefer that showed she had a history of scamming people in her raw food and massage business that Guynn helped her set up.

Guynn’s criminal case has magically disappeared off the Connecticut court case look up system. His attorney, Christian Young, got it moved to the Domestic Violence docket in April. Guynn who had no earlier domestic violence charges was likely allowed to apply for the Domestic Violence Family Education program. The case gets sealed and after a set time of good behavior the charges are erased off his record. Schaeffer, who’d been hounding Guynn for money after he cut off support of her RawFlora business, moved out of New Canaan and I’ve been told is now living on the West Coast.

Guynn’s law firm, King & Spalding, didn’t fire him right after the arrest but he is no longer listed on the company’s website so it looks like he either left or was asked to leave.There doesn’t seem to be a lot of Big Love support in Guynn’s marital life either. Court records show the wife, Kristie, filed for divorce on June 19th. Their lux 6-bedroom 9-bath home at 309 Laurel Road in New Canaan went up for sale this summer listed at $3.6 million. This is the house the police report said Schaeffer was at when Guynn punched her 30 times and they’d have sleep-overs while the wife was gone. There are some sweet photos of the Guynn’s spread here. It’s been on the market for over 150 days and the price has been dropped to $3.295 million.

Guynn’s attorney, Christian Young, did not return emails for comment. I got some agressive attack emails from Schaeffer after I ran a story on her in March and I haven’t been able to reach her to comment on the outcome of her assault case.

SEC Recovers Only $100k From Spongetech Fraud but Stops Metter’s WGCH Income

Spongetech’s co-founder Michael Metter was forced out of his CEO job at last week and had to give up his six-figure income. You might remember Metter’s name when he made headline news around the world for his arrest by the FBI for securities fraud and interference with an SEC investigation. The alleged scam involved the pump and dump of a penny stock company he was CEO of called Spongetech. Metter has been out on bail since May 2010 and allowed to keep his side-job as CEO of four am radio stations he partially owned.

I was first to report last year for DealFlow Media that the SEC, in their civil fraud suit against Metter, was able to seize control of the radio station bank accounts after they discovered Metter and his Spongetech partner Steven Moskowitz had used money from a Spongetech affiliate company to lend the stations $6 million. The transaction was set up as a PIPE deal, which means it involved the sale of Spongetech stock to come up with the funds that BTR then used to pay off Barker Capital who had an asset backed lending fund that gave Metter and his radio company money to buy more radio stations. Metter had also secured his $2 million mid-country Greenwich home as collateral for the Barker Capital loan and when BTR didn’t pay Barker the money back on time they filed a lawsuit to seize the radio station assets and personal assets of BTR owners.

Luckily for Metter he had this high-flyin’ penny stock company, Spongetech, to borrow from and get Barker Capital off his back. The SEC convinced the court this move was similar to money laundering and last year the radio stations, which includes a Greenwich CT am political and business station (WGCH), were named as relief defendants in the Spongetech fraud suit. I reported in February 2010 for Greenwich Time, before Metter’s arrest, that if the SEC sued him for fraud he’d likely lose his radio stations. Well that started to come true last year when the securities regular forced the stations to be put up for sale because they didn’t have the millions needed to pay back the ill-gotten gain from Spongetech.

Today, I reported for finance trade pup Growth Capitalist Investor that court documents show some of the BTR assets have actually sold and the funds are now held by the court. The station won’t answer questions about which stations or assets have sold but I was able to confirm the SEC is telling lawyers in the case it’s only for about $100,000 (net of cost). BTR owns am stations in Pittsburg, Brockton Mass., Las Vegas, and Greenwich. FCC records show the Greenwich and Brockton stations are still owned by BTR and their call letters, WGCH / WXBR are still advertised on BTR’s website. The Las Vegas station was purchased for $3.9 million so if it’s one of the assets that just sold for around $100k that is one heck of a loss. The court appointed receiver for BTR isn’t talking either about the asset sold but by year-end new ownership likely has to be filed with the FCC.

On Friday, Rob Varnon inaccurately reported for Greenwich Time that the Brockton station has been sold for $250,000. Varnon also wrote, “Metter maintains his innocence and said funds from the loan went to pay back a hedge fund that was calling in its loan. He says he did not know the source of the funding was Spongetech.” Now that’s odd since Metter was the signatory power for BTR who received the funds from Spongetech who he was also the CEO of since 2001? SEC filings show Metter signed financial statements and 8-K’s with the SEC stating BTR’s parent Blue Star Media had gotten the loan in question so if he didn’t know where the loan came from then the SEC could just add on another regulatory violation, breach of fiduciary duties because as CEO of BTR it’s his job to know where he is borrowing money from.

These are all documented and easy to research facts Greenwich Time left out of their story. Maybe it has something to do with the fact that Metter’s replacement at the radio stations is Jeff Weber, the chair of the Greenwich Chamber of Commerce and former COO of BTR who was there when the questionable loan went down. SEC filings also show Weber owned shares in Spongetech-it’s unclear if they were ‘given’ as payment for his COO job at BTR or if he bought them on his own. Part of the SEC’s case against Spongetech is the fact that millions of penny stock shares were cashed out via illegal methods of unrestricting stock that wasn’t allowed to be sold on the market. I have to wonder if Weber received any of his Spongetech stock this way? Weber hasn’t been named as a defendant in the SEC or DOJ’s criminal case against Spongetech and also won’t return calls for comment.

Weber told the Greenwich Time last year the Greenwich station was listed for $1.25mn but I reported at Growth Capitalist Investor that people involved in the sale said they’ve haven’t gotten offers anywhere near that.

The monies held from the partial BTR assets sale are meant for defrauded Spongetech investors but my report at Growth Capitalist Investor shows there is now a ‘magical’ new secured lender who claims BTR also owes them millions. This means even if the rest of the stations end up sold, for say $500,000, the SEC will have to fight another court battle in its slow attempt to get back any relief dollars for mom and pop Spongetech investors. The only thing investors can take satisfaction in is Metter’s personal bank accounts, Greenwich home, boat and other assets are still frozen and now he doesn’t have his $8,600 bi-weekly salary coming in.

Dynamic Journalism


Me and doc film maker Nick Verbitsky are immortalized into art for our reporting on the Bear Stearns / JP Morgan double dipping scheme and RMBS investor fraud that has led to over $100bn in lawsuits and a NYAG securities fraud suit against JPM. Verbitsky is on biz TV show The Keiser Report today talking about main street’s frustration with the lack of criminal charges against bankers like the Bear Stearns team led by Tom Marano.

Will Morgan Stanley Banker Accused of Hate Crime now Sue Darien Police for Bad Arrest?

This story has been updated

The Darien Wall Street executive who was arrested for felony assault and larceny this February appears to have beaten the local cops and Stamford Conn. states attorney in their quest to label a white rich Morgan Stanley banker guilty of hate crimes. News broke this morning that William Bryan Jennings will have 2 class D felonies and 1 class C misdemeanor dropped against him on Monday when the case was scheduled to start its court trial.

Jennings made international headline news this March when the arrest warrant written by detective Chet Perkowski of Darien PD detailed statements made by a New York cabbie born in Egypt saying Jennings tried to stab him in the neck and verbalized ‘hate statements’ at the driver after a dispute about the amount of taxi toll from NYC to Darien. The request for warrant report also said the cabbie took off with Jennings in the car (basically kidnapping him) after he refused to pay a near $300 toll. Jennings was booked and had to post $9,500 to get out of jail but the driver, Mohamed Ammar who lives in Queens, was not charged. It sparked an international media debate around bias, hate crimes and bankers behaving badly. But a legal motion filed this summer by Jennings attorney, Gene Riccio of Gulash & Riccio, showed a series of misstatements and material facts left out of the request for warrant report filed by Officer Perkowski and Lt. Ron Bussell.

I read through the media reports by local papers this June and David DesRoches of community newspaper The Darien Times did an excellent reporting job explaining all the alleged inaccuracies and sloppy police work by the Darien Police. The motion DesRoches reported on is called a request for a Franks Hearing. This is where defendants have the chance to put the cops on the stand, without a jury, and hold a hearing questioning how they got to the information listed in the warrant report. A judge can then rule the warrant ineffective. Franks Hearings are hard to get in the Fairfield County, CT court systems because judges don’t like to put another judge’s decision to sign an arrest warrant on the stand.

DesRoches reported:

Additionally, police stated in the arrest warrant that it would have been “virtually impossible” for Anmar to reach back for the knife that Jennings held, which led to Anmar’s hand being cut. Riccio said that the interior of the taxi was examined by himself and the prosecution and it was learned that reaching back would have been possible. Attempts to contact Steven Weiss, prosecuting attorney, to confirm Riccio’s statement, were unsuccessful.

This “assertion of impossibility was one of the three critical reasons” for the arrest, the motion stated, “along with (Jennings) not calling the police on the night of the incident and his refusal to submit to a polygraph examination…”

Anmar told police he thought Jennings was trying to stab him in the neck and defended himself with his right arm while steering with his left hand. Jennings said Anmar tried to take the knife from him, which cut Anmar’s hand. Det. Perkowski, who has been on the Darien Police force for 24 years, stated in the arrest warrant that his investigation “discredits Jennings’ statement that Anmar reached into the back of the cab while he was driving.”

The motion also shows the cabbie never mentioned racial slurs when he was first interviewed by the Darien police and those statements ‘just happen’ to show up after the officers came back a second time to interview Anmar.

Riccio wrote in his Franks Hearing motion, “In light of this repeated conduct by Det. Perkowski throughout the affidavit… the court was presented with an affidavit that was distorted to present Anmar’s assertions in the most favorable, albeit erroneous, light possible and (Jennings’) position in the least favorable, also erroneous, manner possible. These gross and repeated misrepresentations are diametrically at odds with the legal obligation of (police) in the warrant process.”

Darien police Captain Fred Komm told me in an email today the request for the Franks Hearing was actually denied by the court. This mean Riccio didn’t get to put the cops on the stand and question their actions under oath so a court trial was scheduled to take place next. But clearly the State’s assistant attorney took the evidence Riccio presented to heart because right before the trial was to start he wants to drops the charges.

So what happen? If the case had gone to trial Jennings attorney would still have a chance to put the Darien cops on the stand and try to show the court their flaws in the warrant process. This could have been really embarrassing for the Darien police and the judge who signed the warrant. On top of that if the State lost their case the defendant has an even better chance of suing the town for violations of their civil liberties and recovering the cost of attorneys fees and loss of income due to the faulty arrest. Jennings was the co-head of fixed income at Morgan Stanley – a million-plus dollar job. At the time of his arrest on February 29th the bank put him on leave and today Bloomberg sourced unnamed people at the bank who said he didn’t work there any more. I was not able to confirm if Jennings is really out of Morgan Stanley but if he lost his job because overzealous local cops got him arrested for a crime the State is dropping charges on nearly a year later – well that’s real problem in our local justice system.

The cabbie made press statements he’s outraged the case is being dropped but we have yet to hear from Jennings on if he’s planning to sue the town of Darien for violations of his civil liberties based on the Darien Police actions in obtaining an arrest warrant. I have a freedom of information request in asking if Officer Perkowski has had citizen complaints filed against him before and if he’s had other warrant reports challenged in legal filings.

This case looked like an attempt for local cops in a wealthy enclave of Wall Street to be main street’s hero by get a hate crime criminal charge against a big bad rich banker. But was the banker, Jennings, instead the victim here?

UPDATE 12-19-12: One of my commenters was right. It looks like Morgan Stanley totally screwed Jennings on millions of his deferred compensation. This story reads like Jennings public relations person leaked it to the WSJ – a tactic used because Jennings is negotiating with the bank to pay him or he’ll likely sue.

Readers Asked: I Answered – Teri Buhl unwrapped on her Birthday

Today I celebrate the number of years I’ve made a footprint on the world. Yep it’s my Birthday- the big 40! Being an investigative journalist is best job I never knew I’d be doing at this age. And since my work allows me to go behind closed doors of so many people lives, ask tough questions, and shine a microscope on what or why they doing it… all in the name of informing the public — I’m taking the day to answer your questions.

Do me a favor and read the whole page because I have a birthday wish for readers at the end.

Where did you grow up? I was born in San Diego, California. My very southern parents raised in Tennessee escaped to the west coast in the late 60’s via the Navy and the Vietnam War. I got lucky that they stayed and raised us in a So-Cal resort community called Lake Arrowhead.

What did you want to be when you grew up? The first female Supreme Court Justice. But then someone beat me to it so I figured I’d settle with being a trial lawyer.

What happen to those career dreams? Well I got in a really bad bicycle accident when I was 15 and suffered a traumatic brain injury. I lost my sense of smell (who needs it right) and also damaged part of my brain that allows me to get facts into short memory. Spelling, grammar, ability to recall details without looking at notes got a lot harder for me but somehow working with numbers and logic still worked. I got a partial academic scholarship to the University of Southern California in their Marshall School of Business accounting program. Their accounting program was rated Top Three in the country and since becoming a Trojan was a long time dream I took it. So I gave up the lawyer dream and figured a few years in audit for a BIG 6 firm would get me into a cool consulting gig.

So how in the heck did you ever become a journalist? Short Version – After I crashed and burned in the bust (circa 2000) I didn’t work for a while, became a quasi socialite in Newport, RI and helped my boyfriend entertain and meet people – he was trader. A man named Randell Lane discovered me during a Trader Monthly party at a Maybach dealer in New York City when he saw me hanging with all these traders. I’d taken some journalism classes and interned at a design magazine Surface. Lane said if I came and worked from him they’d give me better on the ground journalism schooling than I could get at the likes of Columbia. That was February 2007 – 48hrs later I became an editorial assistant at an international magazine hired to help them figure out the Top 100 traders income. Two years later I was writing about Lane destroying Doubledown Media and leaving tons of reporters without pay and loosing all his investors money.

Who was your favorite editor to work for? That’s tough I worked with over a dozen but if I had to pick one it would be Rich Wilner, the Sunday Business editor for the New York Post. Besides making my reporting sound soooo much better he enabled me to use my business background and market smarts to report some risky news during the 2008 financial crisis. When all my reports about which banks would fail or who’d make millions on a crazy trade idea came true it really helped put my byline on the map. I’m gratefull daily for that experience.

Have you ever been married? No, asked a few times but always said no. I ran away to New York at 24 and left a fiance in So-Cal. I am often in love with my boyfriend though, whoever he is in a given year.

Do you have children? No and don’t plan to. I feel like I give birth every time I report a new investigation… I give it life and watch the market grow it. My work really inspires me and gives me the fulfillment I need – as long you guys keep coming back to read.

Do you make a lot of money as a jouranlist? No – I knew when I left the corporate world this was going to be job that likely barely covered the basics. I think if you’re writing a story because it pays well (or work for Bloomberg who has the highest salaries in journalism) you can get stuck reporting things that don’t matter (fluff) or working for editors who don’t have the reader as their first priority. I think it was one of my journo mentors, Roddy Boyd, who taught me ‘we work for the reader not editors or advertisers’. That mantra always served me well.

Who is your favorite TV journalist? I think Business TV really doesn’t allow enough time to inform the reader and most of what we see today is instagram reporting – make a pretty sound bite without really telling the viewer what could happen. Most readers aren’t trained in econ or finance so I think print gives them more space and time to explain what is really going on. There is one exception to that – I watch TV jurnos Max Keiser and Stacy Herbert on RT’s The Keiser Report – because they make telling the hard truth fun and easy to understand.

Who is the print journalist you respect most? It’s a tie – the late great Mark Pitman who reported for Bloomberg’s investigative team and died suddenly and former NY Post reporting star Roddy Boyd.

Who is the biggest villain on Wall Street? Tim Geithner – Treasury Secretary. I think he has always been too embedded with the banks and rarely has the American taxpayer interest in mind.

So I have one birthday wish I’d like to ask readers. I’d like to shape-up the format of and bring you content with videos and graphics. That means I have to pay a web designer. So if any of the journalism I’ve given you over the last five years has made an impact on your life or helped you understand the dirty messy world of high-finance please DONATE a few bucks ($10 to $25). You can do this via Paypal at Hopefully together we can raise enough make the site look and read even better.

Be Well and thanks for all the support so many of you have given me! It really keeps me inspired when you email expressing how my work makes a difference.

I’ve always been interested in finding the dirt

How the NY AG built his RMBS case against JP Morgan for Bear Stearns Sins

This story has been updated

One documentary film maker, one investigative journalist, and one law firm willing to take a risk led to the lawsuit the New York Attorney General just filed against JP Morgan for a system wide effort to defraud mortgage investors by Bear Stearns.

My readers and viewers of RT’s The Keiser Report know they first learned about Bear Stearns fraud back in 2010 after I was the first journalist to report for The Atlantic Bear Stearns whistleblowers were on the record saying they were directed to make up loan level detail for the mortgage bond raters. From there I broke news again at The Atlantic in January 2011 detailing how Bear’s own internal documents showed the RMBS traders, under Tom Marano, were literally stealing billions from the clients they’d sold the mortgage bonds to via a double dipping scheme.

The documents to outline the double dipping by Bear traders was discovered by PBWT attorney Eric Haas – who also has an accounting background. It was this evidence that enabled him to add a fraud claim, that survived a motion to dismiss, to Ambac’s suit and year and a half later JP Morgan had to admit in their regulatory filings for shareholders that they were now looking at $120 billion in possible RMBS fraud and putback suits. These additional suits filed by the FHFA for the GSE’s and tons of other mortgage investors would have never happen if PBWT hadn’t been first to do the gritty research and detail to build their claims against $JPM/$BS/$EMC.

While this is likely the most impactful reporting of my career it couldn’t have happen with out one documentary film maker, Nick Verbitsky of BlueChip Films. He was first to find former EMC/Bear analyst to go on camera and detail the methods of deceit and fraud by the billions. It was Verbitsky’s unedited interviews that led to my first The Atlantic story. And it was that story to helped open up research for attorneys at Paterson Belknap for their client Amabc.

I remember getting a call notifying me the NY AG’s office had read my reporting and wanted to reach filmmaker Nick Verbitsky to get these unedited whistleblower tapes last year. And then we watched AG Schneiderman slowly start to interview the Bear Stearns whistleblowers which I reported multiple times on RT’s The Keiser Report. A program that was bold enough to trust my reporter instincts, go up against one of the world’s most powerful banks, JP Morgan, and know it was a good idea to warn viewers the bank is going to get their asses sued and it could affect the financial health of the company.

The NY AG also got a push from New York State Assemblyman Morelle who asked him to investigated Bear/JP Morgan for insurance fraud using New York State insurance laws. I first reported the NY AG was beginning his investigation in April 2011 for DealFlow Media’s The distressed Debt Report. Today we see copy cat New York Times reporter Gretchen Morgenson source that people familiar with the AG’s investigation told her he began in the Spring of 2011. In reality Gretchen read my original reporting and the The Atlantic’s mention of it back in April 2011 and I find it absurd that she can’t properly credit where she learned about it first. I have to wonder if Assemblyman Morelle, who chairs the insurance committee, is satisfied with the NY AG only bringing civil fraud charges against JP Morgan – if he’s not will he push the DOJ’s Southern District of New York office to carry the ball over the line and actually charge individual bank traders with criminal wrong doing? You can see a slew of likely illegal actions the Bear traders did that the NY AG left out of his suit in a story I wrote for DealFlow Media last August.

Today’s one of those days when it feels good to be an independent financial journalist and I want to thank my editors at DealFlow Media and The Atlantic along with Max Keiser and his producer Stacy Hebert at RT for publishing all my original reporting on this crime. To my fellow journalist just catching up on the story don’t forget to credit those who were the catalyst for action.

What’s next – I think PBWT and other Big Law firms, who have copied their suit and sued $JPM, are going start taking some serious settlement offers from $JPM and I expect it to be in the billions. I mean look at all additional whistleblowers that came forward from other firms Bear Stearns hired to help them sell mortgage bonds.

As far as JP Morgan shareholders go, if the bank’s payout to settle rmbs fraud and putback claims is in the double-digit billions then I’d expect lawyers to start filing class actions suits against JP Morgan for not disclosing enough rmbs putback risk. This is an issue I wrote about in May. There is also the fact that the SEC went to $JPM back in 2010 and told them they are not holding enough capital for putbacks – I reported this on Max Keiser’s show in November 2010. So why did the SEC allow this big bad bank to under-reserve for the last two years and report higher earnings? That’s a question we’d all like answered but are not likely to get.

Editors Note: Verbitsky’s doc film about Bear Stearns, Confidence Game, is showing at the Bruce Museum on Thursday night in Greenwich,CT. I am a panel guest, along with Roddy Boyd and William Cohan who will be speaking with Veribitsky after the movie. Come see it and hear first hand how we uncovered this fraud and how regulators came to us help build their case.