Epstein’s alleged involvement in 1981 Bear Stearns insider‑trading probe tied to Seagram takeover bid

CHAPTER 22 ished reports, it was Ace Green- troduced Epstein to Greenberg. reenberg’s daughter, Lynne, was cording to them, that was how -by charming a young and beau- vance his career. rted as an assistant to a trader on and quickly worked up to junior yas entitled to a share of the prof- 5 running with the bulls, kicking Lis way. nerg’s office, high above Madison ng. At night, the whole city was lit ! to win or to lose. And there were — 96 Fittuy Ricu women to go with the prize. Tall, beautiful women, blondes and brunettes, who wouldn't have given a math teacher the time of day. Now they found Epstein exciting and handsome. Greenberg’s gorgeous assistant was one of these women. If Greenberg knew about their affair, he did not seem to care. Then again, Greenberg had other things on his mind. The Rea- gan era, when deregulation kicked into high gear, was still on the horizon. But there was already a decreasing amount of gov- ernment oversight on Wall Street, and a new breed of bare-knuckle traders had begun to push every available limit. It was the start of the age of corporate raiders, and with Ace Greenberg looking out for him, Epstein had no reservations when it came to throw- ing his weight around. The golden boy’s gift for working the numbers earned him a place in the special-products division, where he worked on extremely complex tax-related problems for a select group of Bear Stearns’s wealthiest clients—an elite within the elite—including Seagram CEO Edgar Bronfman. In the spring of 1981 Bronfman made a bid to take over the St. Joe Minerals Corporation. He offered forty-five dollars a share, or close to three times the value of St. Joe’s stock. The whole offer amounted to $2.1 billion in cash. But St. Joe’s executives didn’t want to sell their 118-year-old company. In a press release, they called Seagram's bid unsolic- ited and dismissed it as “grossly inadequate.” At which point the SEC decided to investigate. There were allegations of insider trading. Within a few weeks, _ Bear Stearns’s employees were called in to testify. Epstein got called in as well and categorically denied any 4 wrongdoing. But, as it turned out, he’d just resigned from Bear Stearns. GF HOUSE_OVERSIGHT_022066