The Case Of Dan Meyers v. Sailing Anarchy. Get Some Snacks…

August 13th, 2010 by alyx · 2 Comments · bitchfights

…because Dan Meyers will need them. Guffaw!

First Marblehead (NYSE:FMD) CEO Daniel Meyers, like many other wealthy CEOs in his peer group, has a few hobbies outside of raking dollars in hand-over-fist. His other interests evidently include sailing, flying around in a Gulfstream jet owned by his own LLC and sending First Marblehead the bill, and reading about himself on the internets. Hi, Dan!

Anyway, the fine folks over at Sailing Anarchy – one of whom tipped me off to this lolworthy scandal – have had a few very amusing words for Dan over the years, related to his sailing prowess, his business practices and generally ad hominem. Some of their claims, e.g., his resemblance to Jabba the Hutt, he hasn’t bothered to refute. But there are a few wisecracks on the Sailing Anarchy forum that he took personal offense to:

The owners of sailinganarchy.com, the self-proclaimed “largest sailing site on the net,” defamed a CEO and philanthropist by calling him a “grifter” and a “white collar criminal who stole millions,” the businessman claims in Superior Court. He describes the website as “the National Enquirer of the sailing world.”

Meyers says he has “never stolen anything, let alone millions,” and demands general, special and punitive damages from Sailing Anarchy, Tempesta and Block for libel and slander.

Dude, you’ve never stolen anything? Not even, like, a donut out of a Dunkies box intended for a meeting you weren’t invited to? I’m sure someone can refute that claim.

But I digress because really, as we all know, the absolute best thing you can do when someone is talking about you in a forum on the Internet that is read by a niche community (for what it’s worth, the quotation marks that source uses around “largest sailing site on the net” aren’t really necessary, as Sailing Anarchy and SailNet are usually neck and neck for the #1 spot every week in Hitwise for that segment) is to file a lawsuit, and call it to the entire world’s attention, right?

Sailing Anarchy assuredly has some spirited ammunition to use in this case, because the best defense is an affirmative defense. I mean, first and foremost, Meyers resigned from First Marblehead back in 2005, under a cloud of scandal involving inappropriate gifts. Then he came back a few years later.

For some more, here’s a little bit of info on investigations into First Marblehead’s business practices (and re: the Jabba thing, take note of the URL used by the New York Times for that article. Maybe he’ll sue NYT next):

In the last few weeks, [Andrew] Cuomo’s office has started a broader inquiry into the [student loan] industry’s marketing tactics, according to people close to the matter who did not want to be identified because they are not authorized to speak about a continuing investigation. These people say that First Marblehead, the company that [Daniel] Meyers helped found, is one of more than a dozen being examined, and that an inquiry into the incentives used by packagers of private student loans is coming next.

In a statement, First Marblehead confirmed that it had received a subpoena related to its role in the student lending industry. “We plan to cooperate fully with the attorney general’s information requests,” the company said. While Mr. Meyers said he was unaware of any specific investigation, he defended First Marblehead’s practices, including the expanding trade in so-called direct-to-consumer, or D.T.C., loans that are made over the Internet. “Any implication that the company has not stuck to its mission of access and affordability is wrong and unfair,” he says. “The people who choose the D.T.C. route make that choice. It is not foisted upon them.”

But, you say, Cuomo is notoriously anti-business, and that was just an investigation. Here’s a more recent BizJournals article that takes a look at Meyers, the aforementioned Gulfstream jet and First Marblehead stock options. Emphasis mine:

First Marblehead Corp. has taken the restricted out of restricted stock. The Boston-based student loan company, which has spent the past three years slashing staff and costs amid dwindling revenue, recently awarded 1.2 million shares of restricted stock to CEO Daniel Meyers. Usually, at companies with strong corporate governance, restricted stock awards vest over three to five years, for example, or have performance targets attached. The thinking behind those restrictions is to align the interest of a CEO with that of shareholders. It’s a crazy idea, frankly. First Marblehead (NYSE: FMD) said Meyers’ restricted stock (currently worth $4.1 million) vested immediately.

The board, in determining the size and timing of the award, considered Meyers’ integral role in the corporation’s accomplishments since August 2008. Meyers co-founded the company in 1991 and served as CEO until 2005 when he resigned under a cloud of controversy. His exit was prompted by the disclosure he was involved in an improper gift exchange with a First Marblehead customer. Still, most of First Marblehead’s revenue has dried up because the market for student loan-backed assets evaporated when the global credit crisis hit… The company continues to lose money and has been generating negative revenue in recent quarters. That’s another story to be discussed later….

The airplane thing:

In early 2009, for example, Meyers struck a deal with First Marblehead to pay him to fly in a Gulfstream jet that he owns. First Marblehead’s board recently agreed to reimburse Meyers for business-related travel on a Gulfstream G450 owned by his company, Sextant Holdings LLC, according to a Feb. 9, 2009, filing with the Securities and Exchange Commission. Meyers is the sole member of Sextant Holdings, the company said in the filing.

There’s more, but I know SA is on it.

For the lulz, I encourage you to read the thread that started it all, and also, this thread started on Sailing Anarchy in response to the lawsuit.

Happy Friday :-)

2 Comments so far ↓

  • Jablonski

    According to that NY Times article, his company made expensive (e.g. high interest rate) student loans to desparate students with no other loan options. Sounds almost a bit like his LOAN practices were a little bit SHARKy.

  • Ken Pole

    I think you should be expecting a call from the counsel for The Jabba the Hutt Defamation League! I mean, what did poor old Jabba ever do to you to warrant being associated with that corporate parasite? I hear that Boba Fett has been given the contract. LOL! Keep up the great work. Cheque’s in the mail.

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