| WEST HARTFORD, Connecticut
WEST HARTFORD, Connecticut Thomas Bruderman's pals still tease him about the lavish 2003 bachelor party that landed him in financial regulators' crosshairs.
There was a yacht, visits to strip clubs and a dwarf hired for entertainment.
Bruderman says he understands the razzing. "I deserve it," the former star healthcare trader at Fidelity Investments said at a recent meeting in a Starbucks in wealthy suburban West Hartford.
Bruderman is trying to start over, having co-founded a hedge fund. So far he and his partners have raised close to $100 million, including their own money, for their firm to invest.
Strong performance by the fund could help Bruderman leave behind his partying past. Over-the-top bashes are nothing unusual on Wall Street, but Bruderman's became a symbol of excess after regulators said much of it was paid for by brokers seeking Fidelity business.
The Securities and Exchange Commission settled with him last month over allegations that accepting gifts and travel was improper. Bruderman agreed to pay about $350,000 and accept a censure, but he did not admit or deny wrongdoing.
The deal marked the end of a case that transformed gift-giving rules on Wall Street and, Bruderman says, exposed him to countless jokes. "I do not begrudge anyone from having a few laughs at my expense," he said at one point in a series of recent interviews and emails.
The outcome also showed how, as in many investigations, the SEC ended its case in a way that left all sides able to say they prevailed. Other former Fidelity traders settled related claims but did not admit wrongdoing. The result has left Bruderman able both to laugh at the past and to question why he was singled out by the SEC.
"The whole affair was nicely salacious and there was plenty of free press to be had" for regulators, he wrote via email. "The recent headlines have made it abundantly clear that there are issues out there which clearly dwarf this one," he said.
NO ILL WILL
Bruderman left Fidelity in 2004 under pressure, but today says he bears no ill will toward the company or regulators.
In person, Bruderman, dressed in the modern business casual of dress shirt and fleece vest, comes across as self-effacing, hardly the dissolute trader described by regulators.
In past filings Bruderman and other traders said they often reimbursed the brokers for gifts like jet trips and concert tickets.
In other cases, "I could easily have paid my own way," Bruderman wrote in an email, but "my sell-side friends were strongly encouraged by their firms to entertain and in some cases even required to do so."
The dwarf who attended the party was Danny Black, owner of shortdwarf.com, who recounted to news organizations how he was hired as entertainment. The bachelor party was tied to Bruderman's marriage to the daughter of former Tyco International Ltd Chief Executive Dennis Kozlowski, later convicted of financial crimes against the company.
For the record, Andrew Stone, a childhood friend of Bruderman's from Fairfield County, Connecticut, and his partner in the new firm, said he did hire Black, for $1,800, but says there was no dwarf-tossing at the party, as some reports had it. Such activity was banned by Black's contract, Stone said.
After spending $40,000 on legal fees as a witness in the SEC's probe, Stone's takeaway was: "It was a waste of my time and money."
SEC spokesman John Nester declined to comment on Stone's criticism but said: "Few things are as fundamental to market integrity and investor confidence as enforcing the obligation of investment advisers to put their clients' interests first."
In 2008 Fidelity itself agreed to pay $8 million to settle regulator claims it should have better supervised the traders. Fidelity also did not admit or deny wrongdoing, though it put stricter rules in place and says none of the traders sanctioned by the SEC remain at the firm.
Stone and Bruderman declined to discuss some specifics of the case.
Bruderman says he is rarely asked about the probe now in connection with their new investment firm, VP Theta. ("VP" stands for "value portfolio," and "Theta" refers to the Greek letter that in options trading signifies how the passage of time affects option prices.)
The firm uses some quantitative techniques to identify value stocks and invest in equity derivatives. Bruderman, Stone and a third partner may start marketing it in the fall.
All young fathers, the three decided to base their fund in leafy Farmington, Connecticut, considering it a good area to raise families. Since his last wedding Bruderman has divorced and remarried.
His second ceremony was held on a beach in 2008 with only his new bride, a minister and a photographer present. "We sort of eloped and didn't tell anybody about it," Bruderman said.
Why no gala? "I felt like I already had that chapter of my life," he said.
(Reporting by Ross Kerber; Editing by Gary Hill)