Former Lehman Brothers chief executive Dick Fuld isn’t spending his golden years playing shuffleboard and watching reruns of all the shows he missed during his decades atop the Wall Street bank before its epic 2008 collapse.
What he is doing should raise some eyebrows, however.
According to Securities and Exchange Commission filings, Matrix Advisors, Fuld and his wife, Kathleen’s, personal investment holding company, owns a good-size piece of GlyEco, a company whose shares are changing hands at about $1.20 in the lightly regulated over-the-counter market.
GlyEco, like many a small company, was born from the ashes of another penny stock’s busted business model: in this case, Boys Toys, a San Francisco strip club that went public before a rent dispute led to its collapse.
Ralph Amato, the holder of the Boys Toys shell, no longer is affiliated with GlyEco, according to its most recent proxy, but he still owns more than 21 percent of the company, or 9.16 million shares, and is a consultant for fundraising purposes.
Gly-Eco, which is based in Phoenix, has issued filings that are full of assurances that it is trying to play it straight, with a business built on recycling and then reselling Glycol, a chemical compound used to make plastics, polyester and antifreeze.
Somewhere in size between “embryonic” and “small,” GlyEco posted sales of $1.2 million in the first quarter and has cash on hand of $2.2 million, sharp increases over the same period last year.
The improvements were not enough for its auditors. In the company’s annual report, released in April, they remarked that they have doubts about GlyEco’s ability to continue as a “going concern.”
Listed as a “Key Advisor” in the company’s proxy, and owed $230,000 for work done in 2011, Fuld is also mentioned as a potential liability to the company in its disclosure of risks, given that “he might attract negative publicity” due to Lehman’s collapse.
As a story line, it doesn’t have quite the cachet of Goldman’s Robert Rubin going to Treasury, but GlyEco is a definite improvement over Fuld’s prior advisory post, at Legend Securities, a penny-stock brokerage with a roster full of boiler-room alumni.
What Fuld has done for his GlyEco money is unclear from the company’s filings. A spokesman for GlyEco, Brendan Hopkins of RedChip Companies, said that chief executive John Lorenz and Fuld were “old friends” but declined to elaborate; attempts to reach Lorenz for comment were unsuccessful.