It’s one things to change teams in a professional sports league or even to move to rival firm in the business world, but it’s another thing entirely to take off your white hat and put on a black hat, but that’s exactly what ex-Deputy U.S. Attorney Richard Zabel has done. Zabel has been U.S. attorney for Manhattan’s Preet Bharara‘s key lieutenant for several years, and is now taking a position as general counsel for hedge fund Elliot Management.
While Elliott has not been connected to any insider trading investigations during Zabel’s tenure, the firm has dealt with an investigation in France, and is known as a “vulture fund” as it has been vilified on numerous occasions for its no-holds-barred, close to amoral pursuit of profits. For example, Elliott has been a key player in driving the already desperately broke country of Argentina into default over old bonds that virtually all of the other creditors compromised and took a loss on many years ago.
Given the circumstances, it seems obvious to this writer that Zabel is just riding the revolving door to a big financial windfall like scores of other senior government regulators before him. Not that Zabel is doing anything any worse than the rest of the greedy pack of hypocritical fools, but it is both galling and depressing to see moral bankruptcy become the norm in America.
Elliott Management does not let moral niceties get in the way of the law or their profits
The founder of Elliott Management, Paul Singer, has a reputation of sticking to the letter of the law (or contract) and giving moral valuations little to no weight in his decision-making,. Moreover, it appears Zabel is quite aware of this aspect of the organizational culture he is joining: “Elliott has a long record of success and relies on the rule of law as a pillar of its investment philosophy,” Zabel, who will stay at his current job until the end of June, noted in a recent interview.
Sources at Elliott say he will join the firm in September, and will serve on the the hedge fund’s management committee.
Wall Street on hiring spree for federal prosecutors
Zabel’s move to join Elliott Management should be seen in the context of a broader shift on Wall Street, where firms of all stripes are increasingly recruiting federal prosecutors. For example, Steven Cohen’s Point72 Asset Management (formerly SAC Capital Advisors, which plead guilty to insider trading charges in an investigation led by Zabel) also recently enticed an ex-U.S. attorney for Connecticut into joining the firm.