The saga of Wirecard shows no near end – a global manhunt seems to be underway for a top executive who has fled and made the ignominious title of Interpol’s most wanted.
The fraud was undertaken under a long time frame and justifiably attracted the attention of short sellers, including the legendary Jim Chanos whose early career claim to fame is calling Enron the fraud it turned out to be despite its high-flying reputation at the time.
Chanos is back in the news with a timely short on Wirecard which turned his firm, Kynikos Associates, a tidy $100 million profit.
As described by Financial Times, Jim Chanos was seeking some liquidity from his stake in the famed short selling firm and sold a minority stake to a collection of investors, including the family office of former Chicago mayor Richard Daley.
In the year 2020, the annual salary for the mayor of Chicago is noted as a bit above $200,000 a year.
A “family office” is a term that refers to an investment company that is established to manage the wealth of high-net worth individuals. If it is accepted that most folks with the capacity to establish a family office – and pay for the lawyers, administrators, and analysts that accompany such an undertaking – should have a net worth from $30 million to $100 million to start, then we ought to applaud the former mayor for putting in a great deal of overtime for the Windy City.
The former mayor’s administration of the city of Chicago has been accompanied by a reputation that could lead one to question the former mayor’s seemingly astonishingly high net worth. Indeed, in 2006, “A wide-ranging federal investigation into what prosecutors describe as “pervasive fraud” in hiring and contracts at City Hall has led to 30 indictments, including two senior administrators close to the mayor, and a dozen cabinet-level resignations.”
The subtle second-order story begets several questions which maybe have no answers but certainly primarily among them is how did a mayor accumulate such an influential net worth? Maybe he is also a great short seller. Luckily, it seems Richard Daley has made out alright for himself and avoided the fate that awaits the former C-suite executives at Wirecard.
San Francisco Securities Outlook 