NYC Real Estate News

Thu, 07/11/2024 - 05:48

Archegos Capital Management founder Bill Hwang was found guilty of criminal charges stemming from his firm’s 2021 collapse, concluding a two-month trial that captivated Wall Street.

The jury delivered verdicts against Hwang and his co-defendant, former Archegos chief financial officer Patrick Halligan, Wednesday in Manhattan federal court. The panel began deliberating just the day before.

Both men were convicted of defrauding Archegos counterparties like Credit Suisse Group and UBS Group by lying to them about the firm’s trading activity and the level of risk in its portfolio. Hwang was separately found guilty of manipulating several stocks, including the former ViacomCBS, though he was acquitted with regard to one stock. Both men were also convicted of participating in racketeering conspiracy.

Each count carries a maximum sentence of 20 years in prison. U.S. District Judge Alvin Hellerstein set an Oct. 28 sentencing for both men. Hwang remains free on a $100 million bond secured by $5 million in cash and two properties. Halligan is free on a $1 million bond.

Hwang didn’t visibly react as the verdict was read, instead holding on to a plastic water bottle and staring straight ahead. Halligan clasped his hands on his lap and briefly glanced at the jury before looking down at the defense table.

After the verdict was delivered, Hwang got up and warmly greeted his wife and other supporters in the courtroom before exiting. His lawyers declined to comment. Hwang also declined to answer questions as he was leaving the courthouse.

One of the jurors, who asked to remain unnamed, said he was on the fence during most of the trial because he worked on Wall Street for more than three decades. But he said Hwang condemned himself because he was trading on such a large scale and it had a manipulative impact on stocks.

The juror said he felt some sympathy for Halligan, who he thought might have been dragged into Hwang’s scheme.

Manhattan U.S. Attorney Damian Williams said in a statement, “This verdict should send a resounding message that this office will continue to police the financial markets with an eagle eye and swiftly hold accountable those who think they can cheat the system.” Williams’ office brought the case against Hwang and Halligan.

According to prosecutors, Hwang’s actions pushed the value of Archegos, his family office, to around $36 billion at its height. But a March 2021 downturn in Viacom shares sparked a selloff that doomed the firm. Archegos’ counterparties lost some $10 billion, and the disaster was a major factor in Credit Suisse’s 2023 collapse.

Hwang and Halligan are likely to appeal their convictions. Edward Imperatore, a former federal prosecutor who followed the case, said there were viable arguments concerning the definition of market manipulation.

“It is a murky area of the law,” he said, though he added that he doubted the men would be able to overturn their convictions.

Wall Street victims

The scale of Archegos’ success and then its failure stunned the financial community in early 2021. The massive losses suffered by the banks raised serious questions about how they assessed the risks of taking on and extending credit to trading clients. At the time, neither Hwang nor Archegos was well-known on Wall Street, adding to the shock of what happened.

Manhattan federal prosecutors brought charges against Hwang and Halligan a year after Archegos’ collapse, after securing the cooperation of former Archegos head trader William Tomita and former risk head Scott Becker. Both men pleaded guilty and agreed to testify against their former bosses.

At the time, the Archegos case was the biggest white collar case brought by Williams’ office. Unlike in other big Wall Street prosecutions, however, the victims weren’t average investors but Wall Street itself — namely the banks that acted as Archegos’ prime brokers.

Hwang’s lawyers had said before trial that they planned to argue that the banks were sophisticated players that knew the risks of dealing with Archegos, a family office not required to publicly disclose its holdings, and went ahead anyway because of the fees they earned.

Star witnesses

But Hellerstein sharply restricted the defense’s ability to cast blame on the banks, sustaining objections when questions veered in that direction. At trial, the defense focused on trying to present Archegos’ trading as being part of a long-term strategy and tried to suggest that stock prices moved for other reasons than the firm’s alleged manipulation.

Tomita and Becker were indeed the star witnesses at the trial that began on May 13. Becker testified that he lied to banks to win access to credit and trading capacity for Archegos. He also gave jurors a picture of the frantic final days at Archegos as the firm continued lying to the banks to stave off margin calls.

Defense lawyers attacked Becker for having relatively little direct interaction with Hwang. That couldn’t be said about Tomita, though. The former trader worked closely with Hwang and offered damaging testimony about how his boss micromanaged his team to goose stocks to certain prices and also directed Tomita to lie to Archegos’ counterparties about the firm’s portfolio.

Tomita testified that Hwang instructed his traders to do “the opposite” of what a “normal fund” would. He noted that normal funds would try to build up their positions at the lowest cost and try to minimize the impact of their own trading on prices. At Archegos, Tomita said, “I could see that it was me that generated the stock price.”

‘Panic button’

The jury also heard from many Archegos counterparties. Former UBS risk manager Bryan Fairbanks was the first witness to take the stand in the trial, and he vividly described being on the other end of Archegos’ lies.

Fairbanks described being told that Archegos’ portfolio largely comprised highly liquid megacap tech stocks like Apple and Amazon, and that its trading in companies like Viacom and Chinese online education company GSX Techedu was unique to UBS. It was only at the very end that Fairbanks said he learned that Archegos was buying the same companies at all of its banks.

He said he “probably would have hit the panic button” if he had known how concentrated the firm’s positions were.

“All the information they shared with us was lies,” Fairbanks testified.

Hwang’s lawyers tried to suggest Fairbanks and other bank witnesses were biased because Archegos’ failure hurt their careers, but the judge sustained objections to those questions. The defense did manage to gets some digs in at the banks, though.

‘Rich or poor’

In cross-examining Goldman Sachs Group swaps sale specialist Nastassia Locasto, Hwang’s lawyers did establish that that bank viewed Archegos as a gap in its revenue stream and acted fast to onboard the family office as a client when it feared that a $2.8 billion portfolio — and $3 million in annual fees — would head to a rival.

The judge also barred the defense from some attacks on Tomita. Hwang’s lawyers had sought to undermine Tomita’s testimony that he spent the months after Archegos’ collapse wracked with pain and guilt over his actions.

“Do you recall you spent much of July 2021 in St. Tropez, France, playing polo?” Hwang lawyer Barry Berke asked him. Hellerstein sustained the prosecution’s objection before Tomita answered.

“Whether Mr. Tomita is rich or poor, whether he plays polo or baseball, whether he’s in St. Tropez or in Miami Beach, Florida, or New York City, is not relevant to this case,” the judge said. “You can examine his credibility, but you can’t examine his way of life.”

The defense instead focused heavily on normalizing Archegos’ trading as based on widely accepted principles. In opening statements, Berke highlighted Hwang’s devotion to the lessons of Philip A. Fisher’s classic 1950s investment text, "Common Stocks and Uncommon Profits," which has also been cited as an influence by Warren Buffett.

Thu, 07/11/2024 - 05:33

Maimonides Health received $17 million to establish new services for serious mental illness, including a new psychiatric emergency program and a youth inpatient facility.

The Borough Park-based health system announced three grants on Wednesday to ramp up behavioral crisis services – part of an effort to meet a dearth of care for adults and children with severe mental conditions in Brooklyn, said Dr. Abraham Taub, chair of psychiatry at Maimonides.

The state’s Office of Mental Health granted the health system $6 million to build a Comprehensive Psychiatric Emergency Program, a 24/7 program to serve as an entry point for individuals with severe mental conditions. The program allows psychiatrists to involuntarily keep patients with serious needs in their care for up to three days, and includes care such as addiction counseling and social worker support.

The program will operate out of Maimonides’ new psychiatric emergency room, which is in construction and expected to be complete by early next year, Taub said. The new psych ER will quadruple the square footage of the existing psych facility and accommodate between 12 to 15 patients, he added.

Maimonides also received $5 million from state mental health officials to build a 20-bed inpatient psychiatric unit for adolescents. The only Brooklyn hospital that has an inpatient unit for teens is the Kings County Hospital, part of the city’s public hospital system, Taub said, pointing to the lack of inpatient facilities for youth.

“We have kids who are being held up in emergency rooms… sometimes waiting a week or two for a transfer to an institution that has an adolescent inpatient unit,” Taub said. The health system is just beginning to devise construction plans for the new psych facility, and does not have an expected timeline for its completion.

In addition to state grants, Maimonides also received $6.7 million from health insurers Fidelis Care and Healthfirst to contribute to the new inpatient facility, as well as expand outpatient primary care and addiction services.

State funding for the emergency program and inpatient facility are a part of Gov. Kathy Hochul’s $1 billion mental health initiative. The state has distributed roughly $39 million to hospitals to open new Comprehensive Psychiatric Emergency Programs as well as $30 million to community hospitals to add more than 100 inpatient psych beds. 

Thu, 07/11/2024 - 05:33

New York state has long spent the most in overtime on mental health, disability and corrections agencies. But even as overtime spending trends downward, watchdogs say the state should re-evaluate why human service agencies continue to rack up costs.

The Office of Mental Health, the Office of People with Developmental Disabilities and the Department of Corrections and Community Supervision accounted for 69% of the state’s total overtime hours and 66% of all pay last year, despite making up less than a quarter of the workforce, according to a report released by State Comptroller Thomas DiNapoli last month. 

The state spent $1.2 billion on overtime in 2023, an 11% decline from the previous year. Overtime pay among the state’s top spenders has also come down; the state’s mental health and disability agencies saw a 27% decline in overtime in 2023, spending $177 million and $267 million, respectively.

Mental health, disabilities and corrections agencies have long clocked the most overtime. Human service sectors of the public workforce are likely to need more overtime compensation, because they are large agencies and staff state-run facilities like psychiatric hospitals, group homes and prisons 24/7. Yet, officials tasked with overseeing overtime spending have offered little insight into whether these costs are justified, watchdogs say.

“It's good that their overtime numbers are coming down, but lawmakers shouldn't rest on their laurels,” said Ken Girardin, director of policy and research at the fiscally conservative think tank Empire Center for Public Policy. “They should be drilling into how these agencies are functioning and looking at ways for them to do a better job.

State-run disability programs require direct support staff to work overtime if there is no other safe option because of staffing shortages, said Erin Silk, a spokeswoman for the Office for People with Developmental Disabilities. She added that the agency has taken "aggressive steps" to reduce overtime hours. 

James Plastiras, a spokesman for the Office of Mental Health, also said that his agency “strives to be fiscally responsible and has controls in place to prevent unnecessary overtime.”

Many state-run psychiatric facilities have minimum staffing requirements to protect patients, Plastiras said, noting that overtime costs are driven by staffing rules, staff seniority and collective bargaining agreements with unionized employees.

But some overtime pay is questionable. Last year, four psychiatric nurses employed by the Office of Mental Health earned more than $300,000 each in overtime pay, in some cases raking in total compensation five times their total salary, according to data from the fiscally conservative Empire Center for Public Policy.

Huyphuc Pham, a psychiatric nurse supervisor at Bronx Psychiatric Center, for example, collected $350,000 in overtime, the Empire Center said. Pham’s base pay was $98,000 in 2023.

Plastiras did not respond to a question from Crain’s about the four nurses who made more than $300,000 in overtime.  

Overtime pay “that's so high it doubles salary is a sign of crises and management failure — especially in a health care setting where extreme staff fatigue can lead to bad decision making that harms patients,” said John Kaehny, executive director of the government watchdog group Reinvent Albany.

“There’s clearly a problem when an agency whose overall OT is going down a great deal fields the individual OT champs,” Kaehny said.

Girardin said that overtime costs are just one measure indicating how state agencies function, noting that it doesn’t indicate how well workers do their jobs nor whether the state is meeting the needs of residents.

“Overtime is just one gauge on the dashboard,” Girardin said. “The legislature should be putting hundreds of gauges on every agency so that the public and their elected representatives can make better choices about how these agencies run.” 

Thu, 07/11/2024 - 05:33

TB TREATMENTS: A research team co-led by Weill Cornell Medicine received a five-year, $31 million grant from the National Institutes of Health to develop new treatments for tuberculosis, the institution announced Wednesday. The federal government funded the Preclinical Design and Clinical Translation of TB Regimens consortium, a group of more than 30 investigators from 20 institutions to advance new tuberculosis treatments to clinical trials. The research consortium is co-led by the University of California in San Francisco, Johns Hopkins Medicine in Baltimore and Vanderbilt University Medical Center in Nashville.

DEMENTIA CARE: The federal Centers for Medicare and Medicaid Services selected Mount Sinai Health System to participate in a program to test a new payment model for dementia payments, Mount Sinai said yesterday. Under the new payment model Mount Sinai will offer education and training to dementia patients and their caregivers and offer caretakers respite services to try to delay the need for nursing home care. The Upper East Side-based health system is one of 400 participants testing the model, which launched on July 1.

PHHPC MEETING: The Public Health and Health Planning Council’s public health committee is scheduled to meet at 1 p.m. today at the Department of Health offices in New York City. Tune into the meeting here

Thu, 07/11/2024 - 05:03
This week’s properties are in Turtle Bay, on the Lower East Side and in Kingsbridge.
Thu, 07/11/2024 - 05:02
A recent study ranked all 50 states based on the average monthly energy bill in each. Hint: It’s better in the heat than in the cold.
Wed, 07/10/2024 - 18:16

U.S. Rep. Alexandria Ocasio-Cortez filed articles of impeachment against Supreme Court Justices Clarence Thomas and Samuel Alito for what she said was their failure to report gifts and refusal to recuse from cases in which they were conflicted.

Given the Supreme Court’s refusal to deal with the issue itself, “Congress has a legal, moral, and democratic obligation to impeach,” the New York Democrat said in a press release on Wednesday.

Progressives and others have criticized both justices over reports they accepted vacations from wealthy people and failed to recuse from cases despite conflicts they said were created by their spouses.

The success of either resolution against arguably the court’s two most conservative justices is unlikely given Republican control of the House.

Conservatives have decried Supreme Court ethics concerns as a political ploy by the left to undo the 6-3 conservative majority that has overturned the constitutional right to abortion, undermined affirmative action and voting rights, strengthened gun rights, and weakened the power of federal regulatory agencies.

Mark Paoletta, a conservative lawyer and vocal Thomas defender, called the effort on X “Democratic lawfare against their adversaries.”

The Supreme Court didn’t immediately respond to a request for comment.

Samuel Chase was the lone justice to be impeached by the House, in 1804. He was acquitted by the Senate.

Letters, criticism

The move to impeach Alito and Thomas follows efforts by Ocasio-Cortez and other Democrats to rein in what they see as corruption on the Supreme Court, which polls show has been mired in historically low public approval ratings.

Ocasio-Cortez and Rep. Jamie Raskin of Maryland wrote to Chief Justice John Roberts on June 20 urging him to investigate Thomas and Alito. Democratic senators have sent similar requests to Roberts.

Ocasio-Cortez and Raskin also introduced a bill June 25 to prohibit justices from accepting gifts of more than $50. That proposal also is likely to go nowhere.

The Supreme Court has largely thrown cold water on pressure from Capitol Hill Democrats and others to force changes in how justices conduct themselves off the bench.

Critics say a code of conduct adopted by the justices in 2023 for the first time doesn’t go far enough to address ethics and other concerns.

“Given the court’s demonstrated inability to preserve its own legitimate conduct, it is incumbent upon Congress to contain the threat this poses to our democracy and the hundreds of millions of Americans harmed by the crisis of corruption unfurling within the court,” Ocasio-Cortez said in her statement.

Violations alleged

In her impeachment resolution that attracted more than half a dozen progressive cosponsors, Ocasio-Cortez revisited widely reported gaps over the years by Thomas in disclosures of trips, gifts, and other largesse.

Unreported gifts cited in the resolution include a 2019 trip to Indonesia, estimated to be valued at approximately $500,000, tuition payments for Thomas’ grandnephew amounting to more than $6,000 per month, and the 2014 sale of a family home costing $133,363.

The resolution also cites texts from Thomas’ wife, Ginni, in 2020 to then-White House Chief of Staff Mark Meadows about attempts to overturn the presidential election and her attendance at the “Stop the Steal” rally Jan. 6, 2021, ahead of the Capitol riot as reasons the justice should’ve recused from election-related cases.

In failing to do so, Thomas “flagrantly” violated ethics rules, the resolution said.

The resolution seeking to oust Alito also largely centers on the activities of his wife, Martha-Ann. Alito previously stated that she flew an upside-down American flag at their Northern Virginia residence in early 2021. Though the Alito’s claim the flag was flown in response to a neighborhood dispute, critics have noted its association with the “Stop the Steal” movement.

“Justice Alito has indicated sympathy with the efforts to overturn the 2020 election by allowing symbols of support for those efforts to be flown outside his residences,” the resolution said.

Alito declined to recuse from Jan. 6 related cases, including the court’s July 1 decision suggesting broad presidential immunity for former President Donald Trump.

Impeachment resolution cosponsors included Reps. Barbara Lee of California, Rashida Tlaib of Minnesota, Bonnie Watson Coleman of New Jersey, Delia Ramirez of Illinois, Maxwell Frost of Florida, Ilhan Omar of Minnesota, Jamaal Bowman of New York and Jasmine Crockett of Texas.

Wed, 07/10/2024 - 15:30
The term sublease refers to renting an entire apartment, not just a room within a unit. And it's illegal for a landlord to rent out an individual room in an NYC apartment unless the building is designated as a hotel or the apartment is in an SRO.
Wed, 07/10/2024 - 14:55

Beth Israel will not close on Friday after 10 months of saying that July 12 would be its final day in operation, according to an internal memo sent to staff.

The hospital has previously held firm on the original closure date, but two major challenges have foiled its plans for now: The state has yet to approve the closure plan, and a Manhattan judge has blocked the hospital from ceasing services after neighbors and advocates filed suit.

The hospital system did not give a new target closure date, saying that the situation now depends on state and legal forces, but maintained that Beth Israel will still close once the hurdles are cleared.

Mount Sinai leadership expressed its concern in the memo sent to staff from Mount Sinai Health System CEO Dr. Brendan Carr and Beth Israel President Elisabeth Sellman and which was reviewed by Crain’s.

“There is urgency as there are risks associated with keeping the hospital open beyond the proposed date,” the memo reads, noting that the hospital has lost about 450 staff to other jobs.

Lack of state approval is one hurdle standing in Beth Israel’s way. The state Department of Health deemed Beth Israel’s original closure plan incomplete, forcing the system to submit a revised plan in May. The state has yet to reach a decision on the new plan, which included additional information on whether the surrounding community had sufficient opportunity to weigh in on the process and how Mount Sinai has coordinated with neighboring institutions like Bellevue and NYU Langone to address potential gaps in patient care.

A January investigation by the state Department of Health found that the hospital had prematurely ended hospital services without approval.

A lawsuit challenging the closure filed by a group of East Village residents, advocates and community leaders is the other major thorn in the health system’s side. The legal move led to a Manhattan judge blocking Mount Sinai Health System from transferring staff or reducing services at Beth Israel until arguments are presented in court.

The next court appearance will take place on Aug. 8.

Wed, 07/10/2024 - 14:38

Surrounded by park-like grounds, including a pool, this Arts & Crafts-style Hamptons home at 471 Hill Street originates from 1910, and just emerged from a two-year-long renovation. Known as Wayside, the property was originally an artist’s studio, and its original layout, centered around a sprawling loft space with a beamed ceiling, is its most stunning [...]

The post For $7.45M, this elegant Hamptons home has a Florida vibe and Arts & Crafts details first appeared on 6sqft.