The real reason I publish this story is straight jealousy. I wasn't invited.
Even by Wall
Street's over-the-top standards, the March 2003 bachelor party for Thomas
Bruderman, a onetime star trader for Fidelity Investments, was an event to
remember. The festivities began with a trip by private jet from Boston to
a small airport outside New York City. There, the revelers picked up some
Wall Street traders and at least two women who investigators suspect may have
been paid for their attendance, say people familiar with the matter. The partygoers
-- including the groom-to-be, who was getting ready to marry the daughter
of former Tyco International Ltd. boss L. Dennis Kozlowski -- then continued
to trendy South Beach in Miami. The fun included a stay at the ritzy Delano
Hotel for some, a yacht cruise and entertainment by at least one dwarf hired
for the occasion.
"Some people are just into lavish dwarf entertainment," says the
4-foot-2 Danny Black, a part-owner in Shortdwarf.com,
an outfit that rents dwarfs for parties starting at $149 an hour. Mr. Black
says he spent part of the weekend on the yacht and worked as a waiter on the
Friday night at a high-end Miami eatery alongside what he called "regular
size" people. "A good time was had by all," he said, declining
to provide further details.
But what really
made this a memorable party is that it is now a focus of an investigation
into possibly improper gratuities from Wall Street trading firms eager to
get Fidelity's business. The National Association of Securities Dealers and
the Securities and Exchange Commission are examining which Wall Street firms
kicked in money for the weekend party. So far, at least three firms have been
embroiled in the investigation. Jefferies Group Inc. paid for the plane, SG
Cowen & Co. paid for the yacht, and Lazard Capital Markets paid for some
of the hotel rooms, according to people familiar with the matter.
party now figures into a broader criminal investigation by federal prosecutors.
The U.S. attorney in Boston has impaneled a grand jury to determine whether
some of the money flowing from brokerage firms to Fidelity was used to pay
for prostitutes and drugs at the party and other events, according to people
familiar with the matter. Among other things, investigators are trying to
determine if Lazard paid for prostitutes at the bachelor party, the people
Among the guests
on the boat: Mr. Bruderman's soon-to-be father-in-law, Mr. Kozlowski, then
facing felony charges that he and a top lieutenant looted $150 million from
Tyco to pay for their extravagant lifestyles. Mr. Bruderman's wedding to Sandra
Kozlowski later that year on Massachusetts's Nantucket Island was on the eve
of Mr. Kozlowski's first trial, which ended in a mistrial. His second trial
ended in a conviction earlier this year. Scott DeSano, then Fidelity's influential
head of stock trading, was an usher in Mr. Bruderman's wedding and attended
part of the bachelor party.
have taken sworn testimony from guests at the bachelor party and are poring
over receipts from that celebration. They are investigating whether favors
bestowed on Fidelity traders and others influenced how Boston-based Fidelity,
the nation's largest mutual-fund company, with $1.1 trillion under management,
doled out its trading business to Wall Street firms.
companies are supposed to choose brokers based on service and price. NASD
rules also prohibit brokers from giving or receiving gifts valued at more
than $100. Fidelity has similar internal policies. The rule on entertainment
is fuzzier. The NASD allows "ordinary and usual business entertainment"
so long as it is "neither so frequent nor so extensive as to raise any
question of propriety."
One firm, Jefferies
Group, paid for $75,000 worth of airfare to shuttle Messrs. Bruderman and
DeSano and other non-Fidelity traders to the bachelor party, according to
people familiar with the matter. A person familiar with the matter said SG
Cowen, a unit of Société Générale SA, paid for
the yacht party, which ran to almost $10,000. ...
As part of the
gift investigation, SEC investigators have recently questioned Edward C. Johnson
III, Fidelity's chief executive, about tickets he and his wife accepted from
a Wall Street firm to attend a figure-skating competition at the 2002 winter
Olympics. Choice seats for figure-skating events sold for as much as $400.
The company has defended the receipt of the tickets as customary business
party is likely to be harder to defend. Photos of the weekend are circulating
on Wall Street, including ones of men and scantily clad women frolicking on
a yacht, according to three people who have seen them. In one picture, Mr.
Kozlowski is standing with a dwarf on the boat, according to people familiar
with the situation. Mr. Black, the dwarf who worked at the bachelor party,
wouldn't say who paid him for his services that weekend, or how much he was
paid. Representatives of Mr. Kozlowski couldn't be reached for comment.
been able to piece together some of what happened that weekend and on other
occasions through interviews with participants and by reading email and other
In one electronic
exchange made over a trading terminal, then-Lazard trader Robert Ward asked
then-Jefferies trader Kevin Quinn how the two of them planned to "T&E"
Mr. Bruderman's wedding -- using Wall Street lingo for travel and expense.
"Creative T&E...again." he responded, according to a person
who has reviewed the exchange. ... In addition to the bachelor party, Fidelity
traders are under fire from regulators for accepting other expensive gifts
including trips to the Wimbledon tennis championships, Las Vegas and the Super
Bowl in private jets...