Bull in the Market

South Florida philanthropist Richard Bronson built his fortune on the shady side of Wall Street

Bronson learned about contemporary art through the museum, then started buying works by some of the most well-known contemporary painters such as Jean-Michel Basquiat, Kenny Scharf. When MoCA held a show of Haring's work, Bronson loaned a painting from his personal collection. "He seems to have a genuine love for art. He's very willing to back an artist and support an exhibition," says Clearwater, who knows little of Bronson's vocation. "He has a relatively new collection. It's amazing how quickly his eye developed."

On Miami Beach he recently contributed $10,000 to help construct a headquarters for the Police Athletic League, then gave $1000 gifts for Thanksgiving food drives and other events. "Everything I've heard about him is good," says Bernie Winer, PAL director. "He's been very good to us."

It was around this time that Bronson approached Jerry Powers, publisher and cofounder of Ocean Drive magazine, with a business proposition. Bronson invited Powers to Biltmore's Fort Lauderdale office. "It was like seeing the ocean for the first time," Powers says. Filling the entire floor of the vault-like trading room were more than 100 desks, Powers recalls. There were no partitions. A person sat at each desk furiously dialing the telephone.

As Bronson led Powers through the room, "he explained that he would take [Ocean Drive] public and make it worth a ton of money. When I asked him how, he said 'Leave that to me, I can take a telephone booth public,'" says Powers. "I declined his offer." His magazine will now be in competition with Channel.

In 1997 the second phase of the SEC suit against Biltmore came to a close. Traders who had continued fighting the SEC settled. The regulators permanently barred four Biltmore brokers from the business. Siden was barred for a year. They were fined between $75,000 and $100,000 each and ordered to pay a combined restitution of $657,500. By then they had all left Biltmore.

That marked the beginning of a bad year for the company and its president:
*In April 1997 Indiana's secretary of state accused Biltmore of dishonest and unethical sales practices as well as violating anti-fraud provisions of the state's securities laws. Biltmore agreed to pay $175,000 in "fines and costs," according to the secretary of state's office, and reimburse five investors more than $495,000. Indiana barred Biltmore from selling any stocks other than those listed on a major stock exchange. "There was no admission of doing anything wrong," Nortman says.

*In July Arkansas officials ordered Biltmore to pay a $25,000 "censure" and demanded to review the independent auditor's reports from the SEC settlement. Nortman: "That is not a fine."

*In October the California Department of Corporations alleged that Biltmore and two of its traders engaged in "dishonest" and "unethical" business practices. In July Biltmore, Bronson, and Loewenstern surrendered their licenses to do business in the state. Nortman points out, "It's just an agreement. There was no admission of wrongdoing."

*In December the Alabama Securities Commission suspended Biltmore indefinitely from doing business in the state while it investigates the company. The reason: failure to produce requested documents. "That is utterly bogus," Nortman says. "We requested a hearing to resolve this."

Nortman contends that nearly all of Biltmore's recent troubles stem from the SEC lawsuit. States are allowed to cite actions in other states as reason to penalize a firm. That's a shame, he continues. "Whatever errors may have been made in the past, it's like breaking a bone, because when the bone heals it's a lot stronger. Nobody has done anything but make allegations against Biltmore, and allegations are proof of nothing."

But the SEC's Bartholomew has a different take. "It's fair to say that the consultant and auditor have both raised serious questions about the way Biltmore continues to do business," he says. "And Biltmore needs to address them."

Inside the cavernous Shadow Lounge on South Beach, the DJ is spinning vinyl in a booth high above the dance floor. A throng of the young and fabulous swivel and throb in unison. The stainless steel bar stretches down the length of one wall; bottles of booze on top glow like lava lamps. Dade Sokoloff, the general manager, is studying the crowd with a practiced eye to make sure no problems arise. Everything is going smoothly, so he turns his attention to an annoyance: a New Times reporter's questions about Bronson. He suspects an upcoming story about his friend and boss will be negative. "One thing this is going to do is discourage people from getting involved to do good things in the future," he says glumly.

Bronson tapped Sokoloff and veteran Beach promoter Gerry Kelly to launch the club last December. Almost from the beginning it's been a hit, thanks largely to Bronson's infusion of more than a million dollars. The success is a testament to Bronson's skills as a businessman, says Sokoloff. Though the manager runs the place day to day, Bronson visits regularly to review details and finances. Paparazzi often catch Bronson here. "Don't believe all the shit you hear," Sokoloff continues. "People love to slam people who are doing well. So many people come to South Beach and are leeches, and here's a guy who comes here and does all this for the community. I tell you, everybody should give back as much to the community."

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