Wall Street rogues: fast cars, women, and cash. These financial whizzes had it all. But some of them crossed the line to get rich and ended up serving hard time, creating scandals that continue to affect the black investment community

Black Enterprise, August, 2004 by Alan Hughes

Alan Brian Bond had it all. He lived an opulent lifestyle that included shopping sprees at Saks Fifth Avenue, sprawling homes in New Jersey and Florida, and a fleet of 75 luxury and antique cars, But these days, home is a cell located in rural New Jersey. Bond made his name managing more than $600 million in public and private pension funds and by appearing regularly on PBS' Wall Street Week with Louis Rukeyser. But that all came crashing down after prosecutors swooped in, seized his assets, and convicted Bond of numerous securities violations.

Bond's story is one of a financial Icarus who played fast and loose with the rules and flew too close to the sun. This son of a schoolteacher graduated with a bachelor's degree in economics from Dartmouth and an M.B.A. from Harvard. He learned the ropes at one of Wall Street's top firms, Goldman Sachs, but was accused of inflating his expense account and was fired in 1989, according to testimony at his trial. Two years later, he partnered with John and Ernesta Procope, owners of E.G. Bowman Co., one of the nation's largest black-owned insurance companies, to form Bond, Procope Capital Management. With this move, Bond transformed himself into one of Wall Street's all-stars.

But according to prosecutors, Bond conspired with a broker to inflate the fees of his clients' stock transactions in exchange for keeping part of the proceeds from a kickback scheme that totaled nearly $7 million from 1993 to 1998. The Securities and Exchange Commission claimed Bond and broker Robert Spruill defrauded Bond's clients by charging extra for over-the-counter stock trades and pocketing the money. The proceeds of this scheme were used to fund Bond's lavish lifestyle.

After the Procopes terminated their partnership with Bond, he relaunched the firm as Albiond Capital Management. (Ernesta Procope had no comment.) Despite pleading guilty to the charge, Bond's firm continued to manage some $600 million for about 25 clients, including the National Basketball Association, City University of New York, and the Washington Metropolitan Transit Authority.

To make matters worse, prosecutors charged that while out on ball and facing securities violations in 2000, Bond masterminded a "cherry-picking" scheme to pay for his high-priced legal team. Authorities said Bond illegally allocated profitable trades to his own personal account and steered the vast majority of unprofitable trades into clients' accounts. As a result, Bond's clients lost nearly $57 million, while Bond gained approximately $5.5 million, an investment return of more than 5,500%.

When prosecutors came after Bond. his assets were frozen and his firm shut down. The former highflier was forced to rely on the services of a public defender. His bail, backed by a mortgage on his parents' home, was yanked after the second charge, and U.S. District Court Judge Leonard B. Sand ordered Bond to be detained pending a sentencing hearing. On Oct. 11, 2002, Bond pleaded guilty to 10 counts including conspiracy, investment advisory fraud, and filing a false tax return. Facing a maximum of 45 years, Bond was sentenced to 12 years and seven months in early 2003. (Correspondence to the Fort Dix, New Jersey, federal correctional facility requesting to interview Bond was unsuccessful, and calls to Bond's wife, Sheila, were not returned.)

Bond is one of several African American Wall Street stars who have fallen from grace. Many represent a who's who from the BE 100S and have been indicted and, in some cases, convicted of charges ranging from investment advisory fraud to money laundering. For example, Raymond McClendon of Pryor, McClendon. Counts & Co. Inc.--a former BE 100s company--and former city of Atlanta investment officer Theresa A. Stanford were convicted on charges that the two ran a scheme to cheat the city of Atlanta out of $15.3 million in investment profits between 1992 and 1994. McClendon was convicted in 2000 and sentenced to a six-year, eight-month prison term as well as levied a $1.5 million fine. Stanford was sentenced to a three-year, 10-month prison term and ordered to pay $120,000 in restitution to the city of Atlanta. Others who have come under scrutiny include former power brokers like Kevin Ingram, a celebrated trader who made BLACK ENTERPRISE's "Top 25 Blacks on Wall Street" in 1996 and was convicted and served time for money laundering several years later, and Nathan A. Chapman Jr., currently on trial, who recently stood before a judge answering tax and investment-advisory fraud allegations.

A few were cleared of criminal charges but still paid a high price. For instance, San Francisco financier Calvin Grigsby, former CEO of Grigsby, Brandford & Co. and another alum of BE's 1996 ranking of Wall Street players, was charged with bribery and using his bond business to steal more than $1 million in public funds to finance everything from political contributions to expensive cars and Super Bowl tickets. In 1999, a federal judge in Miami threw out the embezzlement charges, but the damage of the trial and declining business compelled Grigsby to shut down his investment bank. Grigsby was cleared of all charges.