Operational Due Diligence

Joel Jean Louis Besse of Atlas Venture

Joel Besse joined Atlas Venture in 1995. Prior to Atlas, he worked as an auditor at Arthur Anderson and Credit Lyonnais in Paris. He began his career in venture capital in 1991 with SED Ventures.

Joel Besse was the founder investor in Xytis Pharmaceuticals, Actelion Pharmaceuticals Limited, Novuspharma SpA. He has also sat on the board at Axovan AG, Entomed SA, Immuno-Designed Molecules SA, Neurotech SA, Laboratories Effik SA, and Modex Thearapeutiques SA.

Joel Besse is also on the advisory board or a director at several companies including Prestwick Pharmaceuticals Inc and Nitec Pharma.

Joel Besse holds a Master of Science degree from the University of Toulouse and graduated from the Ecole Nationale Supérieure de l’Aéronautique et de l’Espace.

In 2002, Atlas Venture hired former biotech analyst, Tim Wilson. Prior to Atlas, Dr. Tim Wilson worked at Bear Stearns International.

In 2002, Atlas Venture closed its Menlo Park and Seattle offices, cut three European senior principals, and shaved another $250 million off its most recent fund, Atlas Venture VI.

In 2001, Atlas Venture raised $950 million international early-stage venture capital fund. The fund was called Atlas Venture VI. At the time, Atlas Venture had six international funds with a total of $2.5 billion in assets under management.

In 2001, Atlas Venture held their annual “Life Sciences Conference.”

In 2000, Atlas Venture raised a $750 million fund which would be invested in technology and electronic commerce.

Atlas Venture is an international early-stage venture capital firm that invests in communications, information technology, and life sciences companies. They have offices in Boston, London, Munich, and Paris. They invest in Europe and the United States. Atlas Venture was founded in 1980.

Atlas Venture was very successful in the mid-1990s after they made several investments in biotechnology companies. At the time most venture capital companies were cutting back on their biotech investments.

Jamiel Andrew Akhtar of HBK Investments, LP

Jamiel Akhtar has contributed $4000 to the Political Campaign since 1999 to present.

Mitchell Joseph Rubin of RiverPark Capital, LLC

A January 2005 article talks about that Mitchell Rubin had the misfortune of launching his technology portfolio little more than one week before the Nasdaq composite index peaked above 5000 in March of 2000. It points out how Rubin’s patience would eventually pay off, and by hanging on to some of the Internet ‘leaders’, his portfolio was able to recover most of its losses.

Mitch Rubin does not consider his Baron iOpportunity fund a typical tech fund. He considers himself a growth manager first, but also searches for investment ideas among companies that stand to benefit largely from the Internet. Some of his worthwhile candidates include eBay and Yahoo!, though he is also interested in companies like Charles Schwab.

In February of 2004, Mitch Rubin commented that people have been debating for years which is more important, media content or the means to distribute it. According to Rubin, it is necessary to have both.

In March of 2006, Mitch Rubin stepped down as manager for the Baron Fifth Avenue fund.

Mr. Rubin states that he is reluctant to characterize his fund as an Internet fund, pointing out that “we are a growth fund focused on the Internet and technology [but also own] shares of some hardcore technology companies such as Dell and Intel…”

Jarrett Blake Posner of Argonaut Management, LP

Jarrett Posner’s father, Steven, was killed in a boating accident in November 2010 in Biscayne Bay, FL.

In January of 2009, David Gerstenhaber was profiled in an article in Barron’s. His fund had never had a down year since it started in 2000. His Argonaut Aggressive Global Partnership fund gained 12.3% in 2008, while the S&P 500 fell 37%. He is said to manage risk very well, providing consistent returns year after year.

In August of 1994, Argonaut Management announced that one of two company partners and head trader, M. Barry Bausano, had resigned. David Gerstenhaber stated that Argonaut would continue to be in business. Two of Argonauts funds had fallen more than 25% in 1994, causing many investors to withdraw money. The company had seen assets go from $395 million to $200 million.

Jarrett Posner and Elana Waksal were married on February 28, 1998. An April 2006 article mentioned that Jarrett Posner and Elana Waksal had split, and that the jailing of her father placed a lot of strain on the marriage. She was rumored to have been dating Burberry heir Craig Barnett.

Mr. Posner’s position as Senior Vice President of Triac Companies Inc was confirmed. He has also had holdings with Encore Capital Group.

Elana Waksal’s father Sam Waksal is currently serving seven years in jail for insider trading. Mr. Waksal was the chief executive of ImClone during the much publicized Martha Stewart insider-trading situation:

In addition to Martha Stewart, Mr. Waksal was also accused of tipping off family members about the unfavorable ruling by the Food and Drug Administration that caused ImClone stock to drop. A June 2002 New York Times article reported that Aliza Waksal, one of Dr. Waksal’s daughters, sold about $2.5 million in shares on Dec. 27, the day before the F.D.A. decision. According to people who have seen the information provided to Congress, Dr. Waksal’s other daughter, Elana Waksal Posner, and her husband, Jarrett Posner, sold 5,600 shares between them, worth more than $300,000. Dr. Waksal’s sister, Patti Waksal, sold about 1,300 shares, but it appears that the sale was done for her by her father and she might not have been aware of it. Dr. Waksal’s father, Jack Waksal, also sold shares, but Congress was not told the number. Frank Wohl, a lawyer for Elana Waksal Posner and Jarrett Posner, declined to confirm or deny the stock sales, but said, ”My clients did nothing wrong.” He said they sold about 10 percent of their ImClone holdings “based on public information at the same time many other investors were selling.” The couple received Wells notices from the SEC, informing them that they might face civil charges. Several articles mention that they are unlikely to face criminal charges.

**Please note: The SEC reports that there are no consumer complaints, civil complaints, investigations, or preliminary inquiries on record involving Jarrett Blake Posner. This confirms that although the SEC may have looked into his involvement, the SEC did not pursue any action against Mr. Posner.

Jarrett Posner is the grandson of famed corporate raider Victor Posner. In 2001 a dispute arose over his estate. A new will was signed on June 28, 2001, and filed with the court Feb. 11 — just hours after Posner succumbed to pneumonia at the age of 83. It named Posner’s business associate and former girlfriend, Brenda Nestor Castellano, his chief beneficiary, while leaving nothing to three of Posner’s four children or any of his grandchildren. Many of the family members sued, claiming Nestor exerted undue influence over a weak and befuddled Posner when he signed the new will. Instead, they claimed the court should recognize his 1996 will. A settlement was reached with Victor’s son Steven in May 2002, but not with the three grandchildren, Jarrett Posner, Sean Posner and Dr. Kelly Posner-Gerstenhaber. Under terms of a will drafted in 1996, the grandchildren were to receive $250,000 each. Nestor offered the grandchildren $250,000 each to settle the case, but was turned down. A legal theory has been floated that partial revocation of the will could result in the grandchildren winning more money in the probate fight than the $250,000 they were left in the 1996 will.

The Securities and Exchange Commission in 1988 accused the Victor and Steven Posner of joining Milken and Boesky in a fraudulent scheme that let the Posners take control of Fischbach Corp., an electrical and mechanical contractor. In 1993, a federal judge barred the Posners from ever again running a publicly-held company because of their “long and notorious history of engaging in self-dealing and corporate waste.”

John Justin Graves of Rockefeller & Company, Inc.

Jeffrey Davis of State Street Global Advisors is named as chief investment officer of Rockefeller & Co. (August 2001).

James McDonald is named as the president and CEO of Rockefeller & Co., which manages more than $5 billion in assets (December 2000).

A Case Study from 1999 was found, in which Oakbrook Solutions was contracted by Rockefeller & Co. to assist in the final implementation of a substantial system development project.

Rockefeller & Company’s Socially Responsive Investment Division issued a letter to the SEC in support of the proposed rules regarding proxy voting disclosure by mutual funds and investment advisors (December 2002).

Rockefeller & Co. and Frank Russell Company announce their intent to form a collaborative program to provide investors with assets exceeding $100 million with customized investment strategies (May 2002).

John Graves is listed as having a “notable stock rating of the week” while at SG Cowen (February 2001).

David Ezra Gerstenhaber of Argonaut Management, LP

In May of 2011 it was reported that Argonauts annual average return has been 16% since its inception in 2000, and had gained 16% since the beginning of 2010, outperforming the SPY by 9 percentage points.

In January 2011 David Gerstenhaber spoke at the Bloomberg European Debt Crisis Briefing.

In August of 2010, David Gerstenhaber was interviewed on CNBC. He stated that the US demographics were working against US equities. The demographics of workers had seen their net worth decline by 50%, planning for retirement, and may have substantial costs related to children and education.

In January of 2009, David Gerstenhaber was profiled in an article in Barron’s. His fund had never had a down year since it started in 2000. His Argonaut Aggressive Global Partnership fund gained 12.3% in 2008, while the S&P 500 fell 37%. He is said to manage risk very well, providing consistent returns year after year.

In February of 2007, Pirate Capital filed suit against a former employee, Miguel Triay. Triay served as one of the company’s directors of sales. He left Pirate and joined Argonaut Capital. Pirate Capital alleged that he stole a list of Pirate clients and violated a non-competition clause by going to work for another hedge fund firm.

In January of 2001, John Trammell left the position of chief operating officer at Argonaut Capital in order to join Investor Select Advisors.

In October of 1997, it was reported that David Gerstenhaber had been hired by Soros Fund Management as one of the managers of the $2.5 billion Quasar International Fund. Yet a report from 1998 stated that Mr. Gerstenhaber lasted only 3 months at Soros Fund Management. One executive at SFM stated that “the chemistry wasn’t right.” Afterwards, Gerstenhaber was reportedly managing $100 million of personal funds from SFM managing directors.

In January of 1997, JetTrain Corporation filed a lawsuit in US District Court for $1.45 million. The lawsuit was filed against investors in the company which allegedly pledged to provide money to help meet financial conditions set by federal regulators before it could be certified to fly. One of the people named in the lawsuit was David Gerstenhaber, who JetTrain alleges owes $1 million.

In 1996, a report from the Baltimore Sun was published titled “AFTER A FALL IN ‘94, GERSTENHABER REBUILDING ARGONAUT.” The article profiled Gerstenhaber and Argonaut Capital Management as they tried to recover from a disastrous 1994 that brought the $400 million investment pool down to less than $50 million. The Argonaut fund was down 28% after the first seven months of 1994 and many clients began pulling money. Yet in 1996 the company rebounded to post 32% and 57% returns in two Argonaut funds.

In August of 1994, Argonaut Management announced that one of two company partners and head trader, M. Barry Bausano, had resigned. David Gerstenhaber stated that Argonaut would continue to be in business. Two of Argonauts funds had fallen more than 25% in 1994, causing many investors to withdraw money. The company had seen assets go from $395 million to $200 million.

In 1993, David Gerstenhaber left his job at Tiger Management in order to start his own hedge fund, Argonaut Capital management. Within six months his British Virgin Islands-based fund had attracted $166 million, according to the US Offshore Funds Directory.

In 1991, David Gerstenhaber left his position at Morgan Stanley and joined Tiger Management. Tiger Management founder, Julian Robertson, first met Mr. Gerstenhaber in 1987 and called him for advice regarding Japanese markets before recruiting him in 1991. The relationship between Robertson and Gerstenhaber was considered lucrative, yet stormy. The two were both described as strong, controlling personalities. The two made 34% before fees in 1992 and 80% before fees in 1993.

David Gerstenhaber is married and has four children.

David Gerstenhaber and his wife, Kelly Posner Gerstenhaber, are both listed as Directors of the Hereditary Disease Foundation.

David Gerstenhaber was described in a 1996 article as being “bright and arrogant.”

David Gerstenhaber graduated from Yale University in four years with a bachelor’s and master’s degree in Economics. He won a Fulbright scholarship to Cambridge before joining Jardine Fleming Securities in Japan and later Morgan Stanley & Co. as an economist.

Christophe J. Arroyo of Seven Global Research, LLC

An article from November of 1999 was found in which Christophe Arroyo is quoted as the managing director of ClickPay, regarding a combined business venture with Open Martket, Inc. that will ease the process of setting up electronic payment systems for global online stores.

Stephen Forrest Saint Clair of Skystone Capital Management

Kerry Lee Nelson of Skystone Capital Management

Bradd E. Kata of QFR Capital Management, LP

A November/December 2002 newsletter from Marcum & Kliegman LLP welcomed Bradd Kata as a staff accountant in the Hedge Fund Department.