Rich Mark (Marc Rich)

Rich Mark (Marc Rich)

Mark Rich is the American trader, one of the legendariest and contradictory figures in the history of Wall Street of the XX century. Rich became famous thanks to creation of spot market of oil, foundation of Glencore - the largest petrotrading company in the world and also to frauds because of which the American authorities searched for its two decades.

Biography

The real name of Mark Rich sounds as Marcel David Raich — Americanization of names was quite traditional practice for immigrants in the USA the most part of the last century. He was born in Antwerp in family of the Belgian Jews in 1934. After occupation of Belgium by Nazi Germany his family managed to run away from the country and moved across the ocean.

In the USA Rich from the very beginning chose career in the financial industry: at the Manhattan university he studied only one semester then he gave up education and began to work in Philipp Brothers company (PhiBro) which was engaged in the stock and curb commodity exchange trading.

1974: Creation of Marc Rich & Co

In 1974 Rich together with the acquaintance Pinkus Green decided to open own case and founded trading company Marc Rich & Co. The competition in financial markets then was sharp, especially taking into account that America endured stagflation of the 1970th and the size of "the general pie" for traders was significantly reduced. To earn money, beginners often had to adopt revolutionary, and sometimes and methods, extremely doubtful in terms of the law. Rich and Green decided to rely on unpromising, in terms of trading at that time, oil.

Up to the 1970th years of oil market in the world as such did not exist. Practically all deliveries were performed according to long-term contracts which the oil companies signed with clients or through affiliated structures. The Arab oil embargo entered against the USA in 1973 became the hole which allowed to bypass this system. Some Arab oil states or representatives of their monarchical families began to look for methods to bypass the ban imposed by them read months later after publication of the solution.

Rich gave them such opportunity, having personally organized oil trade, arriving from the Middle East. His company itself agreed with partners, itself chartered tankers and itself sold the purchased oil in America. Taking into account that it was still possible to purchase hydrocarbons in the Persian Gulf at the price slightly above their cost value, and in the USA the prices read off scale, business went uphill promptly^[1].

Quickly enough Rich & Co had imitators including quite successful so to hold an exclusive position in the market it was unreal. Then the famous trader went further away. In the 1970th he managed to start good communications with Iran. They remained even after in the country there was Islamic revolution, and America was announced by the Big Satan. To Rich and his company dislike of Persians did not extend — with the American both traded earlier, and continued to trade.

However now embargo on trade in hydrocarbons was entered already on the other hand. After occupation of the American Embassy by Muslim fanatics in Tehran of the USA inflicted sanctions for trade with Iran — respectively, conducting any affairs with this state could become the basis for criminal prosecution. But it did not confuse Rich. On the contrary, he estimated an opportunity for receiving an excess profit, Iran not only which got to the international isolation, but also fell a victim of aggression of the Iraqi regime of Saddam Hussein was ready to sell the oil for nothing.

To play and still such games with the American state it was fraught with troubles especially as smuggling of oil from Iran was only one of points in the long list of sins of Mark Rich before Uncle Sam.

1973: Warrant for the arrest, escape from the USA

In September, 1983 the Attorney-General of the USA and future mayor of New York Rudolf Giuliani wrote out the warrant for the arrest of Rich. Participation in financial swindles, racket, illegal trade and at last tax avoidance, record at that time on volume — for 48 million dollars were incriminated to the petrotrader.

Rich and his partner Green, obviously, had quite good communications not only in the Middle East, but also in law enforcement agencies of the USA. Otherwise it is difficult to explain the fact that they took off for Europe literally in several hours before to each of them police officers home appeared suddenly. Fugitives took refuge in Switzerland where obtained citizenship, respectively, Spain and Bolivia. So the trader began a new stage of the career — in exile.

In Rich & Co change of the residence by Rich, however, affected the state of affairs slightly. As before, the company continued to turn large deals, from many of which members of the American government proceeded bile. For example, the firm quickly established relations in the Soviet Union and began to deliver products from the USA, also bypassing the sanctions imposed by the president Ronald Reagan there; did not contract into Rich & Co and the Iranian direction of business.

1993: Resignation, sale to the company to traders

Mark Rich managed the empire created by him till 1993. By then the 60-year-old founder of the company was not so vigorous as 20 years ago, he painfully endured a divorce with the wife Denise to whom he paid, according to some information, $200 million a compensation, and as speak in the company, lost a former grasp. Besides the fact that the company the fugitive from the American justice directs, blocked to firm access to the most monetary American consumers of raw materials. It ended with "Velvet Revolution": the group of the chief traders led by the aluminum specialist Willie Shtrotkhotte and "oil industry workers" Dani Dreyfus and Arie Silverberg convinced Rich to resign.

Rich sold to management of the company the share block (which, by different estimates, made from 75% to 80%). Calculation of "revolutionaries" was correct: soon after resignation of the founder the company could open the fourth head office — in the USA, in Stemford (Connecticut). All packet of Rich was separated among themselves by the leading traders. Now "any possessed neither the control, nor just prevailing packet", Vishnevsky claims. "The new chief executive Willie Shtrotkhotte became the first among equal". In 1994 the company was renamed into Glencore International AG.

Mark Rich was engaged in investments, having opened the new company with an old name,^[2].

2001: Clinton's pardon

Career success of Rich was possible not only thanks to his talents and aggressiveness, but also not least because of very successful defects. In 1966 he married on Deniz Ayzenberg, daughters and the successor of the large producer of footwear from Massachusetts. Though 30 years later they divorced, the former spouse continued to help Rich with affairs that caused one more large scandal.

On January 20, 2001 the U.S. President Bill Clinton signed the order about Rich's pardon (among 176 people). With the stroke of the pen all charges to the disgraced trader were dismissed. The piquancy of a situation consisted that paper was signed in few hours before Clinton had to leave the White House, having given way to his new owner, George Bush Jr.

It is considered that Clinton's solution was influenced by Denise Ayzenberg-Rich. In particular, she offered about 700 thousand dollars on Clinton's Library and also nearly two million — on election campaigns of Democratic party. This money helped Hillary Clinton to be chosen in the U.S. Senate.

Later Clinton justified himself the fact that runaway partners agreed to enter $200 million to treasury and for them such prominent Israeli politicians as the prime minister of Israel of that time Ehud Barak, the Minister of Foreign Affairs Shimon Peres and the former head of intelligence agency Mossad of Shabtay Shavit asked.

2013: Death in Switzerland

On June 26, 2013 Mark Rich died in the Swiss hospital. The private means of this person with ambiguous reputation whom many considered the great "white-collar" criminal and the speculator were estimated at 2.5 billion dollars. What is characteristic, the old trader at the end of life itself fell a victim of frauds. 10-15 million dollars are about Bernard Madoff's fund in which Rich was invested in due time and on which lost, for different estimates.

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