Five Pirate analysts walk plank
By Martha Entwistle
Updated Thu October 5, 2006
NORWALK, Conn.--Pirate Capital, an activist hedge fund and major Brink's stockholder that in August sent a letter to Brink's suggesting the company put itself up for sale, hit some rough waters recently with employee attrition and an SEC inquiry.
The $1.7 billion hedge fund will lose five of its investment employees, according to a Sept. 29 Reuters story. One of those analysts, Zachary George, was the analyst in charge of Brink's, when Security Systems News called Pirate in August.
Pirate "has come under scrutiny by the SEC" because Pirate was late in reporting stock sales, according to the Reuters report.
In addition, the fund has closed to additional investors to "focus on delivering returns" a New York Times report said. Pirate had a call with investors scheduled for Oct. 3, but canceled the call.
Isa Bolotin, investor relations for Pirate Capital, did not return a call for comment before press time.
Jack Mallon, managing partner for Mallon Associates, who outlined the obstacles to a Brink's sale in August, said he believed the fund was "pressuring for a sale on the faulty assumption that there is a buyer out there prepared to pay a premium price." On Oct. 4, Mallon surmised that "Pirate should be preoccupied, and this should take the pressure off the Brink's scenario."
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