There is such a thing as bad publicity

As evidenced by his firm’s non-stop barrage of ads and direct mailings, as well as his own numerous books and interviews with the media, Kenneth Fisher, chairman and chief executive of San Francisco-based Fisher Investments, is hardly publicity shy.

As evidenced by his firm’s non-stop barrage of ads and direct mailings, as well as his own numerous books and interviews with the media, Kenneth Fisher, chairman and chief executive of San Francisco-based Fisher Investments, is hardly publicity shy.
Nonetheless, the opinionated — and extremely successful — investment adviser, who manages $35 billion in assets, couldn’t have been thrilled with a Wall Street Journal story last week that shed light on his lawsuits and arbitration claims against former salespeople who Mr. Fisher claims tried to steal the firm’s clients.
According to the story, former staff members described a company banquet last year where images of Saddam Hussein were shown on a stage while Mr. Fisher castigated an ex-employee against whom the firm had taken legal action. The firm responded with a quote from the ex-employee’s brother, who still works for Fisher, saying that he did “not recall any connection between the [alleged] photographic image and any mention of my brother in any way.”
Mr. Fisher in recent months also has sued New York-based Morgan Stanley and Wachovia Securities LLC, a unit of Charlotte, N.C.-based Wachovia Corp., the Journal reported. The lawsuits allege that the firms helped the former Fisher employees use confidential client information to solicit business.
Morgan Stanley said that the charges are without merit and intends to contest them, while Wachovia declined to comment.

Blackstone blast
Despite mounting threats from Congress about being subject to increased taxation, New York-based private-equity fund Blackstone Group LP’s initial public offering was a rousing success last week, raising more than $4 billion after being priced at $31 a share.
The fact that the IPO was one of the most successful Wall Street offerings ever didn’t escape the notice of Blackstone rival Henry Kravis, co-founder of New York-based buyout firm Kohlberg Kravis Roberts & Co. Word leaked to the financial press that KKR reportedly is planning its own IPO later in the year, as it apparently is determined to cash in on the private-equity mania sweeping Wall Street.
Remarkably, investors seem to be shrugging off a bill introduced in the Senate last week that would tax
partnerships that go public at the
corporate-income-tax rate of 35% on their performance fees, instead of the capital gains rate of 15% they currently pay. Indeed, the private-equity industry is determined to fight the proposed legislation by lining up an army of lobbyists, including the U.S. Chamber of Commerce, as well as its own newly formed trade group, the Private Equity Council. Both are in Washington.

Taking aim
Stodgy New York-based wealth manager Bessemer Trust Co. showed its playful side last week, having some fun at its rivals’ expense in a cheeky newspaper ad.
“Many leading banks represent themselves as independent and stable. And then they get gobbled up,” the ad copy stated in capital letters. It went on to note that wealthy investors may be “concerned” by “further consolidation in the wealth management business,” which has resulted in “an ever-shrinking universe of alternatives for substantial investors.”
Needless to say, the 100-year-old privately owned firm was more than happy to offer its services to “families with $10 million or more to invest.”

High-court highlights
Wall Street and corporate America scored two big wins before the Supreme Court last week, as the high court made it harder for plaintiffs to bring antitrust suits against investment banks and for shareholders to claim securities fraud against companies.
In Credit Suisse Securities (USA) LLC v. Billing, the court protected investment banks from investors hoping to use antitrust laws to challenge the underwriting practices of broker syndicates. In Tellabs Inc. v. Makor Issues & Rights Ltd., the court raised the legal bar for trial judges to assess the viability of shareholder suits, dealing a blow to class action lawyers across the country.