The Truth About John Sakowicz
by Tim Stelloh, April 22, 2009
John Sakowicz’s columns for the North Bay Bohemian usually concluded with a bio, a sliver of personal history to add authority to hisarguments about the country’s economic crisis: “John Sakowicz is a Sonoma County investor who was a co-founder of a multi-billion dollaroffshore hedge fund Battle Mountain Research Group.”
Since that bio surfaced last year, his columns have been distributed to other Bay Area alt-weeklies in the Boho chain; he’s appeared as apundit on Al-Jazeera; he’s been endorsed by the Institute for Public Accuracy—the San Francisco organization that connects so-calledexperts with journalists—and he has, of course, become a regular on KZYX, where his radio show, “The Truth About Money” airs every other Friday.
Yet there’s little evidence to suggest Battle Mountain is what Sakowicz says it is.
Sakowicz says he started Battle Mountain with some “buddies from Wall Street” in Grand Cayman, according to an article he published in May 2006 on the web site of his alumni university, Johns Hopkins. Neither the Cayman Islands Monetary Authority nor the Cayman Islands General Registry Department has any record of Battle Mountain. Nor does the federal Securities and Exchange Commission.
Though offshore hedge funds are not required to register with the SEC, Kris Devasabai, an editor with Hedge Funds Review, said any number of business dealings would likely have put Battle Mountain on the department’s radar. “If they were involved in trades, or if theybought shares that pushed them over the disclosure threshold, or if they were involved with companies that went into bankruptcy, they would have to file with the SEC,” he said.
Devasabai said he had never heard of Battle Mountain.“For them not to have their own web site, that's normal,” he said. “But at least there would be filings with the SEC.”And if Battle Mountain is—or was—a multi-billion dollar operation, it would be a formidable fund, a serious player in the world of finance, Devasabai said. Yet a search of the archives of several business publications—including the Wall Street Journal and the Financial Times—found no mention of Battle Mountain Research Group. An analyst at the Ermitage Group, an asset management organization, gave the same verdict: “No one here has heard of Battle Mountain,” he said.
Sakowicz declined to be interviewed for this story, or to provide any specifics on the fund’s finances. In response to a question about Battle Mountain’s financial statements, his assistant, Ellen Cruz, said in an e-mail she could not “confirm or deny” any aspect of Sakowicz’s personal or professional life. “However, I can tell you that, as a general matter, an unregulated offshore fund operated on behalf of foreign investors is generally of no great interest to U.S. based regulatory agencies,” she wrote. “Also, please be aware that many ‘tax havens’ or ‘corporate secrecy havens’ throughout the world have few, if any, registration requirements. This was true even for the Cayman Islands up until 2004, when the law was revised as a result of pressure by the U.S. Department of State.”
The timeline for Battle Mountain is unclear. But in April 2005, a Johns Hopkins “alumni notes” web posting refers to Battle Mountain as “a registered offshore hedge fund” and Sakowicz its chief financial officer. Sakowicz’s response to the AVA’s request for documentation was unusual, Devasabai said. “It’s not the standard way of dealing withthis stuff,” he said. “Even if it’s off the record, hedge funds want to show you they’re legit.”
Jay Johnson, who once co-hosted the Truth About Money with Sakowicz on Ukiah Valley TV, said that during the several months they workedtogether he never saw any proof of Sakowicz’s high-rolling credentials.“He knows his financial lingo,” he said. “But he’s never invested for me. I’ve never seen his books. I’ve never seen any hard evidence of anything. But he knows how to talk about it.”
At KZYX, John Coate, the station’s general manager, said he didn’t see any problems with Sakowicz’s résumé when he gave him the show. “I asked him about what he was up to, I found what I could on the net, I asked him about it some more, and I was satisfied,” he said. “It didn’t look like it would create problems for the program he was doing.” And the questions surrounding Sakowicz’s hedge fund? “Yes, the guy has had a complicated life leading up to this point,” he said. “But he’s got a radio show. He brings in guests, and I think the quality of those guests are evidence of his credentials. For the the purposes of the program, he’s fine.”