On Aug. 4, 2012, a bright young mortgage department employee at J.P. Morgan named Ben Sayer was all smiles: The head of a rapidly expanding hedge fund said to have almost $200 million in assets—one Anthony Davian of Davian Capital Advisors—had invited him to attend his fund's annual golf outing for clients at the swanky Firestone Country Club in Akron, Ohio. And this meant, to Sayer at least, that he might be on the verge of snagging a job offer at Davian's Akron-based fund.
While a job offer at any hedge fund certainly represented a dream opportunity to him, the prospect of being offered a slot at Davian Capital was something apart: It was a fast-growing and remarkably successful effort, with annual returns allegedly exceeding 20 percent when other, much more well-known funds were struggling to earn half as much.
Better still, Sayer liked the way that Davian himself used social media—Facebook, Twitter, YouTube and other services—to share ideas and market his two funds. It seemed to Sayer, a 27-year-old University of Akron graduate, that Davian was as willing to swap insights with him as readily as he would kick around ideas with veteran traders managing hundreds of millions of dollars. Davian's informality and willingness to engage in dialogue made him appear entirely different from the hedge fund industry legends in New York.
Sayer was right about one thing: Davian eventually did offer him a job as an analyst at Davian Capital and he could dream, briefly at least, of acquiring the experience that would propel him to riches and perhaps enable him to launch his own fund one day.
But within a month of Sayer's taking the position, the smile had vanished from his face and questions about the firm came to him fast and hard. Not only could he not get a straight answer from Davian about where the $200 million of client capital was, but by this past June, the fund itself had come to a standstill after being besieged by fraud allegations from all directions.
Things got even worse: After Anthony Davian's wife found him passed out in their car suffering from carbon monoxide poisoning earlier this month, he was rushed to the intensive care unit of a hospital. Meanwhile, a growing number of regulators swarmed over the fund asking some very pointed questions about what had happened.
When the Southern Investigative Reporting Foundation examined the fund's documents and conducted multiple interviews with investors and the fund's founder and employees, it uncovered a very different reality behind the well-constructed image of Anthony Davian and his fund. It appears that Davian's greatest accomplishment may be the invention and marketing of his image as a tech-savvy fund manager of an immensely successful hedge fund portfolio.
While Davian's assertions that his fund's asset base reached about $200 million appear to be pure fiction, there's no doubt that the fund's investors have suffered sharp losses in their investments, with the extent of the damage still unknown. Though the Davian Capital Advisors drama can't rival other hedge fund sagas in size, for sheer difficulty in sorting out the true from the false it has few rivals.
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If potential investors had done any advance digging, they might have encountered several red flags in Anthony Davian's background. Raised in the Greater Cleveland area, Davian attended Holy Name High School in Parma and the University of Akron, from which he claimed to have received a 2003 degree in accounting, following a course of study that helped make him "a lethal short seller."
While Davian did attend the University of Akron and appears to have studied some accounting, he did not graduate, according to the school's registrar's office. Moreover, according to public records, the school had a $2,221 lien in place on Davian's assets as of April 2011 for nonpayment of unspecified debts. An attempt to garnish Davian's wages from a series of bank accounts he disclosed to the courts proved unsuccessful in 2011 and 2012 since the accounts were closed or empty.
Some years earlier, in April 2003, Davian had sought personal bankruptcy protection from his creditors in the U.S. District Court in the Northern District of Ohio, and the online record indicates he was granted relief by that July. At least six other claims against Davian from creditors remain outstanding, including another lien attached by a law firm he once hired.
rest http://sirf-online.org/2013/07/15/the-erstwhile-hedge-fund-king-of-akron-ohios-very-hard-summer/
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