Guggenheim Partners financier Scott Minerd dies aged 63
Chief investment officer was well-known face of firm as it grew into large US money manager
Scott Minerd, the global chief investment officer at Guggenheim Partners, has died after suffering a heart attack during a regular workout, the Chicago based financial firm announced said on Thursday.
A former competitive bodybuilder, Minerd joined Guggenheim shortly after its founding in 1999. He became a well-known commentator on markets, with pronouncements on macroeconomic trends that were closely tracked by investors and on Twitter, where his followers numbered 169,000. He was considered one of the great bond investors of the past few decades.
Minerd, who was 63, was a high-profile face of Guggenheim as it transformed itself from the private investment office of the wealthy Guggenheim family into one of America’s biggest money managers with $285bn in assets. He was also a key adviser to US central bankers as a member of the Federal Reserve Bank of New York’s Investor Advisory Committee on Financial Markets.
“I have known Scott for over 30 years and we were partners much of that time. Scott was a key innovator and thought leader who was instrumental in building Guggenheim Investments into the global business it is today,” Mark Walter, chief executive and a founder of Guggenheim Partners said in a statement. “He will be greatly missed by all. My deepest condolences are with his husband, family and loved ones.”
The FT reported in 2017 that Minerd and Walters were engaged in a years-long power struggle over the direction of the firm they had built together, and had clashed heatedly over specific personnel decisions. The two came close to parting ways but ultimately decided they were better off working together.
Born and raised in Pennsylvania, Minerd attended the Wharton School at the University of Pennsylvania and the University of Chicago Booth School of Business and worked briefly at accountants Price Waterhouse. He then moved to Wall Street, doing stints at Merrill Lynch and Morgan Stanley as a bond trader and then working closely with Bob Diamond, later Barclays chief executive, while both were at Credit Suisse First Boston. Minerd then retired to Southern California in his 30s.
In the late 1990s, he met Walter, who was running an insurance and investment firm, Liberty Hampshire, which would eventually become the foundation for Guggenheim Partners.
Guggenheim, known for its secretive culture, grew into a Wall Street powerhouse featuring not just Minerd but also Todd Boehly, now CEO of Eldridge Industries and co-owner of Chelsea Football Club in the UK and Major League Baseball’s Los Angeles Dodgers. Later the firm would move into investment banking with the star adviser to top executives, Alan Schwartz, leading its Guggenheim Securities business.
Minerd was a fixture of the Los Angeles finance scene and a friend and acolyte of Michael Milken. Married to Eloy Mendez, he was a long-time resident of Santa Monica but had recently bought two Florida condominiums. Minerd was also a major benefactor of the Union Rescue Mission, Los Angeles’s oldest and largest emergency shelter, and he served on the board of overseers for the Hoover Institution, a free market conservative think-tank.
Body building was one of Minerd’s greatest passions. After moving to Venice Beach, Los Angeles, he joined Gold’s Gym, known for being the mecca for weightlifters and home to the likes of Arnold Schwarzenegger. At his peak, Minerd could bench-press 495 pounds 20 times and competed in the Super Heavyweight division, according to a Bloomberg interview.
“Scott was a fixed-income master — brilliant at deciphering intermediate and long-term changes in interest rates. He was a dear friend and supporter. I will miss him,” wrote Bill Gross, the founder of bond-focused investment house Pimco.
German regulator rebukes Standard Chartered over European operations
BaFin orders bank to hold more capital against risks from organisational flaws
Standard Chartered’s European business has serious organisational flaws and must hold extra capital because of the risk this causes, Germany’s financial watchdog BaFin said on Thursday.
BaFin’s public rebuke of Standard Chartered Bank AG is its second within three months. In October, it criticised the bank after a special audit uncovered that its internal organisation did not meet legal requirements.
At the time, BaFin ordered the bank to fix organisational problems without disclosing details of what they were. On Thursday, BaFin said the business in Europe needs to increase its capital buffers because of these problems, again without disclosing any further details.
BaFin declined to comment. Standard Chartered told the Financial Times in a statement that it took “this matter very seriously and [has] already implemented corrective actions to ensure we fulfil all aspects of the remediation within the timeframe set by the regulator,” adding that it was “co-operating fully with BaFin”.
Standard Chartered is headquartered in London and obtained a European banking licence in 2018 so that it could continue to operate in the EU after Brexit.
According to the bank’s website, Frankfurt-based Standard Chartered Bank AG is “the hub for our EU activities”.
According to the entity’s latest annual financial statement, which was audited by EY Germany, it is responsible for clearing all of the lender’s European payments, with fees from payments processing making up the bulk of its income. Standard Chartered Bank AG last year received an unqualified audit from EY.
In December 2021, the UK’s Prudential Regulation Authority fined Standard Chartered £46.6mn and criticised it for “failing to be open and co-operative” with the regulator and for “failings in its regulatory reporting governance and controls”.
The PRA said Standard Chartered had made five errors reporting a liquidity metric between March 2018 and May 2019, which meant the watchdog did not have a reliable overview of its dollar liquidity position, and in one case notified the PRA of the error only after a four-month internal investigation.
BaFin’s intervention is the latest sign that it has become more proactive after it was criticised for its inaction during the Wirecard scandal.
Last month, it threatened to fine Deutsche Bank if it missed deadlines for fixing its money-laundering controls, the latest escalation of a four-year tussle between lender and regulator.
Amazon hit by ECJ ruling on online sale of counterfeit goods
Case related to knock-off Louboutin shoes sold by third parties may lead more brands to challenge US ecommerce giant
Amazon may be responsible for the sale of counterfeit Louboutin shoes on its store, the EU’s top court has said, in a judgment that observers have said will embolden brands frustrated with the volume of knock-off goods sold on the ecommerce giant’s store.
In cases brought in Luxembourg and Belgium in 2019, Louboutin argued that third parties were selling inauthentic versions of the brand’s distinctive red-soled shoes, a protected trademark, to unsuspecting Amazon shoppers.
Asked by those lower courts for its interpretation of the law, the European Court of Justice made a preliminary ruling on Thursday that agreed with Louboutin’s concerns that Amazon’s website did not make it clear enough when customers may be purchasing goods from a third party, rather than directly from the ecommerce giant itself.
The case will now be handed back down to the lower courts for a final judgment. The outcome is likely to have repercussions for how Amazon displays and sells products from third parties on its store in the face of major brands’ longstanding concerns about counterfeiting.
“I think other brands will have a very close look at this case and say ‘hey, maybe we can we can go down the same route’,” said intellectual property lawyer Fabian Klein from Pinsent Masons. “The direction of the ECJ is pretty clear. Life has got tougher for Amazon.”
Amazon’s role in handling and delivering the counterfeit products was of particular significance, the ECJ said, as it blurred the line for consumers in knowing which company they had bought the products from.
Amazon said: “We will study the Court’s decision.”
In chasing its goal as the “Everything Store”, much of Amazon’s product selection growth has been fuelled by opening up its marketplace to third parties who own and list their inventory on Amazon’s online stores globally. These sellers were responsible for 58 per cent of all units sold on Amazon, the company said in October.
“Thus far, Amazon acted like a department store that allowed unknown third parties to display counterfeit goods on its own shelves, which not only led to great confusion amongst consumer on the origin of the goods, but also greatly bolstered the distribution of counterfeit goods,” said Thierry Van Innis, a lawyer for Louboutin.
“After this judgment, Amazon will have little choice but to adjust its business model and make a very clear distinction between goods offered by itself and goods offered by third parties,” he added.
The company has faced similar complaints in the US, where several state-level judges have deemed Amazon responsible for dangerous products sold by third parties.
Amazon has argued that it is a middleman and should not be held liable. In response to brands’ complaints, in 2020 the company launched a counterfeit crimes unit, made up of “former federal prosecutors, experienced investigators and data analysts” to take legal action against counterfeiters.