From today’s Boston Herald:
Chris Gabrieli has been trumpeting his business triumphs throughout the Democratic governors race, but several companies hes invested in have been plagued by fraud, insider trading and other scandals, including a hospice giant that recently agreed to shell out millions to flimflammed investors.
The article contains some really nasty practices, including artificially inflating stock prices, bogus accounting practices, and a pharmaceutical company with “one of the deadliest clinical trials in U.S. history.”
The article concludes by saying,
While Gabrielis campaign is distancing him from the companies scandals, the firms are among those Gabrieli has pointed to on the campaign trail as evidence of his claim to have created 100,000 jobs in Massachusetts.
that a person with a large portfolio would have a few of these in there. Some of the responses in the article were also enlightening and minimize Gabrieli’s role in any of the “nasty” actvities.
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” Another pair of companies in Gabrielis Bessemer portfolio – Alkermes Inc. and Epix Pharmaceuticals – were sued in 2005 by shareholders for corporate fraud, but both suits were dismissed.
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Spokesman Joe Ganley acknowledged that Gabrieli was a key investor and board member with VistaCare, but said he cut his ties in 2002, two years before shareholders levied charges against the company for bogus accounting practices and fraudulently inflating earnings.
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He also said Gabrieli invested in PerSeptive, but years before the Framingham-based company paid out $12 million in 1995 to settle stockholders claims that the company reported bogus earnings. The company came under fire again in 2000 when an executive paid a $200,000 fine for insider trading and fraud.
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According to Ganley, Gabrieli had little involvement with running any of the companies other than his investment.
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You can only be responsible if you have control, he said.”
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This is much like Deval being involved with Ameriquest, Texaco, & UAL and saying he was responsible for all of their “nasty” activities.
The difference is that this is his venture capital organization. As a member of that organization he is making the choice of which companies to fund. It is not like a mutual fund where you buy the fund but the constituent stocks might change.
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That said I still agree with you that it is pretty immaterial to the current debate and honestly I can’t see holding it against him. (Big reveal time) I worked for Halliburton as a consultant at one point in my career. Does that mean I can never run for office on a Democratic ticket? I don’t think so. You get involved and try to change things, even if it is in a very small way, and there by make the company better.
This is another red herring story that I’m surprised people give the time of day to. He’s an investor, not any type of director. Stick to the issues.
Having worked many years ago for a venture capitalist, I have a different perspective. In that business, it is necessary to scrutinize companies very carefully to ensure that a good investment is made initially and that thorough examinations occur on a regular basis (to protect investors). Sloppy investments and lack of examination can result in Enrons or Ameriquests. So, I’m curious as to whether this is a personal portfolio or one tied to the venture cap business. If personal, not a big deal. If professional, then I hope we learn more about the history. Consider that the Big Dig was a huge investment that failed. We don’t need any more of those.
I don’t know. There are an awful lot of little investors who are making successful claims of fraud, while Chris seems to have lots of money to spend on running for office. If it was one little company that he backed, there would be no cause for concern. However, given the string of companies, fraud, unhappy investors, and Gabrieli’s wealth, it just leaves many unanswered questions.
Gabrieli made hundreds of investments over the years, the overwhelming majority were successful and a ton were for good casues and results. Yes, Gabrieli made alot of $, but he has been incredibly generous in sharing that wealth for great causes and those less fortunate.
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In this case, it is a matter of whether Gabrieli made any of the decisions that led to/resulted in the negative actions sited in the article (i.e. did he have the control/authority/power to enact what is noted in the story?). He did not – end of story although I am sure not the end of insinuations given where we find ourselves on the calendar.
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David Wedge is typically a republican backer who has had difficulties with accuracy in the past. He will also look to soften everyone up for Healey between now the general…and then he will really go to work on the eventual nominee. He labeled Deval Patrick as “Hot” a few weeks ago based upon the results of last month’s Suffolk poll – one of the only media polls to date that had Deval off the pace in a noticeable way. Gabrieli was up in that poll 32% to 24% Patrick and 20% TR. He said that based upon these results Patrick was pulling away. If Mr. Wedge cannot read a simple poll, I am guesing that he might have some difficulty accurately connecting the dots here if there were actually any dots to connect. Some smoke here, but really no fire unless I am missing something and see some proof.