Steven Schonfeld’s conspicuous consumption
Aaron Lucchetti has a 2,000-word front-page WSJ story today which appears online under a “management” heading and with the headline “Wall Street’s B-List Firms Trade on Bigger Rivals’ Woes”. Really, however, it’s all about the obscene displays of wealth being perpetrated by Steven Schonfeld, the new poster boy for conspicuous consumption.
Schonfeld’s new $90 million house, on Whitney Lane in Old Westbury, Long Island, not only has “a poolside cabana designed to look like the Cove Atlantis resort in the Bahamas” but also sports a 9-hole golf course which is off-limits to anybody if Schonfeld isn’t at home:
“It’s not a private golf course,” he explains. “It’s a personal golf course.”
And then there’s this:
At one dinner with traders, he said that anyone who looked at the menu for more than 90 seconds was in the wrong business…
At high-end restaurants, Mr. Schonfeld has been known to order one of everything on the menu, with his party leaving much of the food uneaten.
Schonfeld got into a spot of bother (including $1.1 million in fines from the NYSE) when he tried to be a broker, so now he’s basically just a trader, hiring laid-off employees from big Wall Street firms and seeding them with his own money. Or, as Forbes put it in 2005,
Schonfeld oversees a harem of semi-independent traders who use his equipment, his software and his capital, sharing profits with him and paying him trading commissions.
It’s possible that he’s exaggerating the amount of money he’s spent on his house, and is giving obnoxious interviews to the WSJ, in order to stand out from a crowded field of small trading shops. Or else he’s maybe just a leveraged day-trader who made lots of money from the volatility of 2008 and now wants to flash his cash. Either way, I suspect that Schonfeld is going to be spending much more time on his
private personal golf course than at the Old Westbury Country Club down the street. This kind of attitude tends not to sit well with one’s upscale neighbors.