AA Capital (Continued)

On Friday, I linked you over to the AA Capital Partners website, where suspended managing partner John Orecchio was still listed as an active team member. Hope you saw it early, because the entire site went MIA by early that afternoon.

I don’t know if this was done because: (A) AA Capital hopes to avoid any additional publicity or (B) The firm does not know how to edit its own website. I say even money.

 

Anyway, a formal hearing on the case is scheduled for tomorrow in Chicago. Maybe AA Capital really does have a good explanation for its shenanigans, but I’m even more doubtful after obtaining a 99=-page affidavit filed in the case.

First, the sheer extravagance of Orecchio’s T&E expenses — not to mention those that replace E with A — is staggering. For example, he spent more than $175,000 on private jets in May 2006, over $67,000 at the Tryst Nightclub in Vegas on February 4, 2006 and more than $75,000 at the Temple at Tao nightclub in Vegas this past New Year’s Eve. And that really is just the beginning.

 

Even more troubling is that AA Capital actually does have a compliance officer/CFO named Mary Beth Stevens. But I have no idea what she actually does. She allegedly told SEC investigators that the firm “does not keep a general ledger or journal throughout the year. Rather, AA Capital assembles financial records just before its outside auditors arrive to begin field work as part of the firm’s annual audit.”

Before that process begins, Stevens said that “she does not know AA Capital’s current financial position.”

Heck of a job Mary.