‘Epstein was running a blackmail scheme under the cover of a hedge fund’: NY magazine reports on Wall St speculation

Convicted sex offender Jeffrey Epstein claims to be a billionaire hedge fund manager. But his real business may have been a blackmail scheme that could end up implicating many of his powerful friends.

"Given this puzzling set of data points, the hedge-fund managers we spoke to leaned toward the theory that Epstein was running a blackmail scheme under the cover of a hedge fund," New York Magazinereported Thursday.

The magazine spoke with multiple Wall Street insiders for the story, including Douglas Kass of Seabreeze Partners Management.

“I’m hearing about the parties, hearing about a guy who’s throwing money around,” Kass, who lives in Palm Beach, Florida. "I went to my institutional brokers, to their trading desks and asked if they ever traded with him. I did it a few times until the date when he was arrested. Not one institutional trading desk, primary or secondary, had ever traded with Epstein’s firm.”

“How did he get the money?” Kass kept investigating.

“I don’t know anyone who’s ever invested in him; he’s never talked about by any of the allocators,” a billionaire hedge-fund manager told the magazine.

Kass was one hedge-fund manager who emailed around a Twitter thread explaining how such blackmail would work.

“This actually sounds very plausible,” former hedge-fund manager Whitney Tilson said while emailing the thread around to Wall Street colleagues.

Here is the full thread by Quantian1: