Picower left legacy of praise and scrutiny

When he died last year, Jeffry Picower left behind a multibillion-dollar fortune – and the complicated legacy of a life and career that won praise and engendered ­suspicion.

Picower was hailed for his generosity to philanthropic causes and scrutinised by regulators for his business dealings.

He was a self-made billionaire known for his investment savvy. In a letter this week, Goldman Sachs described him as a “valued client” who had generated returns of more than $2bn over the past three decades. Yet he entrusted his money to two of the most notorious figures in recent Wall Street history, Bernard Madoff and Ivan Boesky.

While he sought to keep a low profile, rarely granting interviews, the spotlight would inevitably return – even in death, as his estate this week agreed to hand over $7.2bn to the victims of the Madoff Ponzi scheme.

Picower first invested with Mr Madoff 35 years ago after being introduced to him by an accountant. Like Mr Madoff, not all of his dealings remained below the radar. A New York-born lawyer and accountant, he gained renown in the 1980s as the largest individual investor in Mr Boesky’s biggest arbitrage fund, according to Den of Thieves, James B Stewart’s account of the Wall Street scandals involving Mr Boesky and Michael Milken.

Reid Nagle, Mr Boesky’s chief financial officer, considered Picower “one of the most mysterious” investors, according to the book.

“Nagle had no idea where Picower’s money came from; he occupied an unmarked office suite in an anonymous Manhattan tower,” Mr Stewart wrote.

Picower was sued by a former client for allegedly placing him in a questionable tax shelter that the IRS was scrutinising. He paid an undisclosed amount to settle the claim. In 1984, the Securities and Exchange Commission cited him and several other investors over late disclosure of holdings in Bradford National.

He and his wife, Barbara, founded the Picower Foundation in 1989. He donated millions to institutions such as the Metropolitan Museum of Art, the Massachusetts Institute of Technology and the New York Public Library. The foundation shut down in late 2008 after losing most of its assets in Mr Madoff’s scheme.

He enjoyed reading, playing squash, and going to the movies with his wife, according to William Zabel, his lawyer of two decades. Picower, who lived in Palm Beach, had Parkinson’s disease and a heart condition, his lawyer said.

At the time of his death, Picower’s Goldman account held $4.5bn in unrealised gains, including $2.2bn in Apple stock. William Zabel, his lawyer, said it is not clear how much money the estate will hold after the settlement. In accordance with his will, the estate will establish a new charitable foundation, he said.

Picower left $200m to his wife, $25m to his daughter and $25m to MIT’s Picower Institution for Learning and Memory. To everyone else, there remains an abundance of questions.