At 81, high-frequency trading pioneer Ed Bosarge is in court battling ex-business partners, the founder of a stem cell clinic of which he took control and the wife he dumped. She says he’s got billions stashed in a constantly changing array of offshore and South Dakota trusts.
For more than a decade through 2015, Houston-based Quantlab was a money machine, generating more than $3 billion in cumulative profits from proprietary high-frequency trading that on some days accounted for 3% of NYSE volume. More than 70% of those profits went to founder Wilbur “Ed” Bosarge—or rather, to trusts he controls.
Quantlab cofounders Bruce Eames (with a 24% stake) and Andrey Omeltchenko (with 4%) are now suing the 81-year-old Bosarge for fraud. (He denies their claims.) Bosarge is also facing a fraud suit from the founder of a Bahamian stem cell clinic that he funded, took control of and at which he received multiple treatments—for, he said in a deposition, “bad ankles, bad knees from skiing, muscles that pulled out. When you reach 70, 75, various things start going wrong and you have to deal with them.”
But Bosarge’s most notable current legal battle—for what it shows about the way U.S. state trust laws increasingly protect the rich—is with his wife, Marie, a 66-year-old onetime Marilyn Monroe impersonator Ed married in 1989. In the summer of 2017, while Marie was in London putting the finishing touches on their newest pad, a $45 million Georgian mansion in billionaire haven Belgrave Square, Ed served her with divorce papers. Marie says she was shocked. Yes, she says, she knew about Ed’s twentysomething Russian mistress, but she assumed Ed would see it as too expensive to divorce her since the couple didn’t have a prenuptial property agreement and Texas is a community property state—meaning everything earned during their marriage, including those Quantlab profits, would be jointly owned.
Marie contends she’s owed a billion or more, although she tells Forbes she’d settle for less than $100 million. “I’d be happy with that. To just pay my bills and move on with my life.”
Forbes estimates Ed Bosarge is worth at least $1 billion. But as he and his lawyers tell it, the couple’s community property assets total just $25 million since an array of trusts own not only his Quantlab stock, but also their homes in Houston, Aspen, London and Maine and the 72-acre island in the Bahamas where they docked their three (trust-owned) yachts, including the eponymous 180-foot Marie, complete with a baby grand piano. After the divorce papers were served, one of the trusts even repossessed a $1.9 million (purchase price) diamond necklace which Marie says Ed gave her as a Christmas present in 2009. “That wasn’t a gift; that was specifically bought by the trust. It was a specific investment,’’ Ed insisted in a deposition last year.
Read the full profile on Forbes: https://www.forbes.com/sites/christopherhelman/2020/09/04/how-to-hide-a-billion-dollars-three-techniques-the-ultra-rich-use-to-dodge-ex-spouses-the-taxman-and-disgruntled-business-partners/#6a5cdd895994
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