Oakley Country Club in Watertown, Mass., was in the headlines in 1989 after Walter Curran, “a socializing stockbroker who used the [club] as an office,” fleeced more than $2 million from investors, many of whom were fellow members. Now another Oakley member has been charged with gaining illegal profits using sensitive information gleaned through a golfing friendship with another club member.
Oakley Country Club in Watertown, Mass., is “back in the headlines and in the middle of another money scandal that has tongues wagging on fairways across the state,” the Boston Globe reported.
The new headlines relate to insider trading charges brought on July 18 by the Securities and Exchange Commission (SEC) against Eric McPhail, an Oakley member and champion golfer who, the SEC alleges, gleaned sensitive information about a public company from another club member who was an executive at Devens, Mass.-based American Superconductor Corp. (AMSC), the Globe reported.
The SEC charges allege that McPhail forged a friendship with the executive over golf and drinks and then traded on illegal tips and passed them along to a group of buddies, most of them competitive amateur golfers, the Globe reported. Together, the group made $720,000 in illicit profits over a two-year period on AMSC stock, according to a federal indictment.
The charges against McPhail have revived an even more unpleasant memory for Oakley CC, the Globe reported— the 1989 case of Walter Curran, who “over nearly a decade, fleeced more than $2 million from investors, primarily from fellow members at Oakley, gaining their trust through many rounds of golf.”
Curran “drove a Jaguar, wore a gold Rolex, and picked up bar tabs all over town,” the Globe reported, as he became known as “the socializing stockbroker who used the Oakley Country Club as an office and promised clients 20 percent returns.”
When clients got onto Curran, he tried to disappear, but authorities caught him at the Canadian border with more than $100,000 stuffed in plastic bags, the Globe reported. The con man pleaded guilty to fraud and spent a few years in prison.
The Globe’s report linked the cases at Oakley CC to renewed scrutiny by authorities of “greed on the green,” referencing the questioning earlier this year of Phil Mickelson, three-time winner of the Masters, about potential to insider-trading violations relating to transactions he made in shares of Dean Foods.
Some clubs—and golfers—frown upon business being conducted on the course, the Globe said in its report, believing that “it should be about the sport and building relationships [and leaving] the deals for the clubhouse afterward.”
But for others, the Globe added, golf is a game for the moneyed who want to know how to make more money.
“The truth is a tremendous amount of business gets done on the golf course,” said John Spooner, a Boston wealth manager who has written a book on golf, told the Globe. “You have a captive audience for five hours. Tongues get loosened with the sport and the camaraderie.”
Bernie Madoff, one of the biggest Ponzi schemers of them all, used to raise money through country clubs, capitalizing on the idea that you’ll listen to friends, the Globe noted. One of Madoff’s foot soldiers, Bob Jaffe, used to find investors at his club, Pine Brook Country Club in Weston, Mass., the Globe added.
The Globe’s report included comments by “Joe,” who asked that his last name not be used, an 81-year-old retired lawyer who said he was a former golfing buddy of Walter Curran’s who lost more than $1 million from Curran’s schemes. “Joe” never recovered all of his money, and avoided the stock market for years, the Globe reported. But he has remained a member of Oakley CC (with a total membership tenure now of 45 years), and while he said he didn’t know Eric McPhail, he didn’t like to see the club be returned to the spotlight for the same negative reasons.
“Oakley is in the news, and I don’t like it,” “Joe” told the Globe. “It’s not fair. What some individuals do is clearly not indicative of the quality of all the people there.”
If The Country Club in Brookline (Mass.) is known for exclusivity, the Globe reported, Oakley is anything but stuffy. Founded in 1898, it “attracts a middle-class crowd and is known as a place where doctors, lawyers, and bankers play alongside plumbers and construction workers,” it was noted.
“It’s consciously unpretentious,” club president Peter Miller told a Globe reporter while conducting a tour.
Oakley, which features a Donald Ross-designed golf course that offers views of the Boston skyline from its ninth hole, now has about 500 members, the Globe reported. While many live in the suburbs, new ones tend to come from the city, because the club is only a 15-minute drive from Boston’s Back Bay.
The club’s members, the Globe reported, include “super lobbyist” Tommy O’Neill, a former Massachusetts Lieutenant Governor and the oldest son of former Speaker of the House Thomas “Tip” O’Neill. Another member is former Massachusetts attorney general Tom Reilly, who can be found at Oakley almost every weekend, the Globe reported. “It’s a wonderful place with great people,” said Reilly, now a private-sector lawyer. “I’m a lousy golfer, but I love it.”
Asked about the insider trading allegations, Reilly added, “I don’t think it has anything to do with the club, whatever happened or didn’t happen.”
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