Did ex-Trader Monthly EIC take liberties with art, sources?

TALKING BIZ NEWS EXCLUSIVE

By Teri Buhl

It looks like Randall Lane, former editor in chief and president of bankrupt Doubledown Media, the publisher of Trader Monthly magazine, which went under last year, has some explaining to do.

Vanity Fair is publishing, via an agreement with Penguin Press, in its July issue an excerpt from his book, “The Zeroes: My Misadventures in the Decade Wall Street Went Insane,” about famed ’60s pop artist Peter Max and his business dealing with Doubledown. It’s a gossipy story that will hit national newsstands tomorrow.

It’s quite the vindictive read written from Lane’s first-hand point of view, and according to interviews with the subjects in the story, Talking Biz News has learned it’s packed with some inconsistencies.

What’s most alarming is that Vanity Fair has published a photo of exclusive Peter Max art featuring four well-known hedge fund titans that Max thinks it doesn’t have permission to publish. Max painted portraits, for the 2008 Trader Monthly Top-100 Trader Income story, of Wall Street’s famed hedge funders.

The art ran as illios exclusively in Trader Monthly, with Max retaining copyright and republishing rights to the work and photos. Doubledown never paid Peter Max for the photos. Vanity Fair then reached out to Max asking for copies of the hedgie art work , which are the subject of Lane’s excerpt, and Max told it no. But still they showed up on p. 119 of VF’s current issue.

Max tells Talking Biz News he’s really disappointed and has contacted Vanity Fair asking for an explanation. A Vanity Fair spokeswoman says Peter Max’s studio gave it permission to run pictures of the artworks on the condition that it got permission from the subjects of the paintings, which it did.

How this slipped through the cracks of Vanity Fair’s stellar photo department is currently being investigated. What we have learned is that Lane went to one  hedgie and its press firm and asked for permission to run the art, at the request of Vanity Fair.

Additionally, the prices Lane says the hedge funders paid Max for their self portraits — Lane says he got the prices directly from the Max studio — wasn’t ever confirmed with most of the hedgies we talked to. People inside of Jim Chanos’s firm tell us he never bought the six panels of art Lane says he did and paid less than the $175,000 Lane reports he paid — a fact Team Max confirms.

A Vanity Fair spokeswoman says, “Our figures for prices paid for the artworks were obtained through a solid source close to the deals. When we checked the figure for Mr. Chanos’s deal with Mr. Chanos he informed us that the figure was not ‘accurate,’ but did not provide other figures. The editor then emailed him and asked, ‘Jim, how do you suggest we correct them.’ Mr. Chanos never responded, so we went with our source.”

All this makes us question what else in Lane’s aggressive account, of a business deal with the artist that didn’t work the way he wanted, is real? Lane portrays the pop artist as a Wall Street leech who uses a magazine publisher to get access to moneyed financiers with big egos to sell his art.

That’s a notion that many close to Peter Max find absurd. At least when Vanity Fair checked some of Lane’s story facts with Max it learned Lane’s account of Max making art for the Larry King’s cardiac foundation and then pocketing $1 million for himself was disputed by Max and the magazine added his denial to the story. Unfortunately, Max now gets to battle with Lane’s book publisher.

What Lane’s story really shows us is a shady journalistic line. In this case it’s providing access to his reporters’ high-powered sources.

As one of the reporters on the Top-100 Trader Income story, I’m appalled Lane was pimping art to the hedgies I’d been reporting on and building trusted relationships with — if I’d known I likely wouldn’t have agreed to do the exclusive reporting for Trader Monthly. Luckily most of the traders I spoke with who bought the Peter Max art say they bought it because they like his work. But how often do we hear of magazine editor in chief turning to art sales to make money for their publication?

Vanity Fair can of course print a clarification and pay the artist for rights to his work, but that’s not all that Lane borrowed for his story in Vanity Fair.

Lane’s story waxes on about the famed trader’s income in 2007 and how they made it. Those details were taken directly from the reporting myself, Chris Gillick, and my editor Rich Blake worked exclusively to get. Lane was not involved in the research, reporting, and sentence writing for the Trader Monthly stories that it appears he’s basically rewritten for his book and Vanity Fair. That content is now owned by Dealflow Media, which bought Trader Monthly assets out of bankruptcy for only $53,000 in March.

We see Lane rewrite on pp. 124-125 of the Vanity Fair story exclusive reporting that I worked for months to get, detailing that John Paulson sought out swap deals that require cash collateral and forced a bulge bank to fork over a $500 million payout over a reverse margin call. Dealbreaker credits Trader Monthly for writing about this when I broke it – but not Randall Lane.

A spokesperson for John Paulson tells Talking Biz News they were never called by Lane or Vanity Fair to fact check the story or Lane’s book. Paulson was never interviewed by Lane. A Vanity Fair spokeswoman says Vanity Fair fact checked this fact with a totally independent source who had spoken directly to Mr. Paulson.

With Lane working as an independent journalist and contributing editor on some of The Daily Beast finance stories, you’d hope he’d at least respect journalistic standards and give reporting credit to me and my Trader Monthly editors Blake and Gillick. I’m sure they are sitting there as frustrated as I am over the hedgie news lifts by Lane — all in the name of trying to get his book promoted. A publicist working on Lane for the book says that proper credit is given to the authors in the book’s end notes and in earlier chapters.

I think we all just want an explanation from Lane, whom I called and e-mailed, on why he did it. Stay tuned. 

Teri Buhl is a freelance investigative reporter covering Wall Street. She was on the edit team of Doubledown Media in 2007 and is not a creditor of the bankrupt media company. Buhl has written for Trader Monthly, New York Post, Dealbreaker, Business Insider, New York Magazine, The Atlantic.com, Fortune.com, and the Greenwich Time.

Editor’s Note: Buhl and Lane have traded barbs before, as noted here by Felix Salmon at Reuters.