Leon Cooperman leaves hedge fund business, but he isn't going quietly
Leon Cooperman is leaving the hedge fund business, but he isn't going quietly.
The famously hot-headed hedge fund legend did not mince words Monday night during a retirement party attended by some of Wall Street’s biggest names, National Enquirer publisher David Pecker, and a comedian known for his impersonations of former President Obama, taking some parting shots at the Securities and Exchange Commission (SEC), which people close to him say he blames for forcing him out of the investment business after a 50-year run, the Fox Business Network has learned.
Wall Street’s top cop sued Cooperman in 2016 for insider trading violations — allegations Cooperman vehemently and publicly denied. Many friends of Cooperman believed the charges were retaliation from the SEC under President Obama for public criticisms Cooperman made of the former president’s use of class warfare during his eight years in the White House. Cooperman famously wrote in 2011 an open letter to Obama that went viral, calling the former president’s policies and public statements about the rich “divisive” and “polarizing.”
In 2017, Cooperman settled with the SEC for a fine of $4.9 million, without having to admit wrongdoing. Cooperman has said the terms of the settlement were a victory for him and proves he did nothing wrong.
But the wounds of his battle with the SEC are still raw with the 75-year-old billionaire, as was apparent during some remarks he made at his retirement bash Monday night.
“Leon believes the SEC acted like a criminal organization in going after him unfairly,” said one Wall Streeter who attended the soiree. “He thinks they came up with a phony charge because of what he said about Obama. And he basically said that at the party.”
The soiree was held in a private room at the swanky Estiatorio Milos restaurant in Midtown Manhattan. Before a select crowd of 50 friends and former colleagues, Cooperman thanked the people he worked with during his long career on Wall Street, as well as his wife of 54 years, Toby Cooperman. The Bronx-born son of a plumber also promised to “sleep a little late, go to the gym” and continue to invest his own fortune, estimated at $3.2 billion, while in retirement.
But Cooperman couldn’t help throwing a few jabs at the SEC, which he still loathes. The SEC charges forced many large investors to pull their money from his hedge fund Omega Advisors despite its record of strong long-term returns, and was the main factor in Cooperman’s July 23 decision to return outside shareholder money and effectively retire from the hedge fund business, people close to him say.
In an interview with Fox Business, Cooperman said the SEC charges weren't the reason he decided to retire from the hedge fund business, but he confirmed that he took some shots at the SEC during his remarks. “They ruined my business unfairly,” he said in a telephone interview. “As far as I’m concerned I won the case. I paid a small fine for me, which I would have paid immediately. I didn’t have to admit wrongdoing, which they initially wanted me to do. Like Kenny Rogers said, ‘You got to know when to hold them, know when to fold ‘em.’”
Cooperman’s career on Wall Street spanned 50 years, half of which he spent at Goldman Sachs where he became a top partner and earned the reputation as one of Wall Street’s best investors. In 1991, he launched Omega, a hedge fund that has had one of the best long-term records in the business. Although he has stopped managing outside money, Cooperman will continue investing his own fortune in what’s known as a “family office.”
The party was intended to be a celebration of his long career, with various guests giving toasts and extolling their friendship with Cooperman. The A-list Wall Street types in attendance included financier Ken Langone, mutual fund maven Mario Gabelli and hedge fund investor Michael Steinhardt. Also in attendance was Pecker, the gossip-rag publisher who recently made headlines for his involvement in hush-money payments to women who said they had affairs with President Trump: porn star Stormy Daniels and Playboy Playmate Karen McDougal.
Warren Buffett was said to have been invited but did not attend, according to a person with knowledge of the matter. Langone, Gabelli, Steinhardt and Buffett didn’t return calls for comment.
Pecker has been friends with Cooperman for years and Omega holds nearly a 10 percent stake in Pecker’s holding company, American Media Inc., which owns several media properties, including the National Enquirer, US Weekly, Star, In Touch and Men’s Fitness [Editor's note: Charles Gasparino wrote a personal-finance column for Men's Fitness).
Pecker is also a close, long-time friend of President Trump. According to court filings, Pecker bought the rights to McDougal’s story of an alleged affair with Trump — a practice known as “catch and kill.” He also had discussions with Trump associate Michael Cohen about the hush-money payment to Stormy Daniels. Cohen eventually negotiated a deal with Stormy Daniels on his own. Both occurred during the 2016 presidential campaign.
In August, federal prosecutors granted Pecker immunity in exchange for his cooperation in their investigation of whether these payments violated campaign finance laws. Cohen has pleaded guilty to eight federal charges, including campaign finance law violations involving the payments, and faces jail time.
While Pecker has not been charged in the matter, he has suffered from its fallout, friends and associates tell Fox Business, and he used the party as an opportunity to publicly thank Cooperman for remaining a loyal friend when others walked away from him. Pecker is an alum of Pace University, and Cooperman said Pecker was recently forced to leave the university's board of trustee's because of the controversy. A spokesman for Pecker wouldn't dispute that characterization. A spokeswoman for Pace University said in a statement, "David resigned his position on the board to focus his time and resources on his business. He remains an active supporter of the university."
Pecker's resignation letter, obtained by Fox Business, was dated Aug. 23, the same day the news broke about his immunity deal.
“He was one of 50 guests who were handpicked by me,” Cooperman told Fox Business. “I have publicly stated my support of David Pecker. I have no idea what the f___ he did or didn’t do. He got up, gave a toast and said, ‘Lee is a real gentleman. A lot of people abandoned me and he didn’t.’”
Pecker didn’t return telephone calls and emails for comment; a spokesman said he had no further comment.
Cooperman’s famously contentious relationship with former President Obama was also part of the festivities, thanks to Steve Einhorn, vice chairman of Omega, who confirmed to Fox Business that it was his idea to hire as a surprise guest famed Obama impersonator Reggie Brown.
Einhorn called Brown’s approximately 15-minute skit “a light moment at a celebration dinner.”
Dressed in a dark suit and tie, Brown entered the room in full Obama mode and opened his comedy routine telling the audience that he “was having dinner with Senator Schumer upstairs and the waiter told me there was a high profile guest down here... There are folks from all over our nation here tonight — from the rough and tumble streets of Boca Raton to the bustling avenues of Manhattan.”
He then turned to Cooperman’s famous “open letter” to the former president, where Cooperman criticized Obama for “setting the tenor of the rancorous debate now roiling us that smacks of what so many have characterized as ‘class warfare’ . . . the divisive, polarizing tone of your rhetoric is cleaving a widening gulf . . . between the downtrodden and those best positioned to help them.”
“Every night as president I’d read 10 letters from everyday Americans and one day I get a letter that smelled of Paco Robane cologne,” Brown said. “ After seven years that letter still holds up, I keep a copy in my pocket to remind me of my mission.... and to smell like Paco Robane.
Comedian and President Obama impersonator Reggie Brown (Reggie Brown)
Brown then turned to Cooperman and said: “The second reason I came is...well....I’m trying to expand my portfolio. What’s the market outlook?” Alluding to Omega’s recent investment in marijuana stocks, Brown quipped: “I think legalizing marijuana is a great idea. People say it won't stimulate the economy, but I say, 'Yes weed can.'”
Brown's performance fees range from $10,000 to $25,000 plus first-class expenses per performance, and in an interview with Fox Business, he said Cooperman appreciated his performance. “He was heckling a bit during the act,” Brown said.
In fact, Brown said he did such a good job, he may have fooled one of the people in attendance into thinking he was really the former president. Brown said after his skit, someone Brown identified as CNBC host Jim Cramer approached him and said: “I’m such as big fan of yours.”
“I hope he meant he was a fan of my impersonation but the way he was acting, I think Jim may have thought I was the real Obama,” Brown told Fox Business.
Neither Cramer nor CNBC responded to multiple requests for comment to determine if Cramer was in fact in attendance.