The year was 1973. I was a newly minted stockbroker in the employ of Paine, Webber, Jackson, and Curtis, fresh out of training from Fairfield University in Fairfield, Connecticut. I was duly licensed by the New York and American Stock Exchanges, the New York Mercantile Exchange, and the Chicago Board of Trade, ready and able to serve clients in the purchase and sale of stocks, bonds, and commodities futures. I returned from New York to begin my new career in offices in Encino, California.
As the newbie in the office, I was stuck with staffing the office for walk-ins after the markets closed. While occasionally a substantial potential client dropped in, most were retirees or people with a few shares of stock they wished to sell. In between the walk-ins I would cold call doctors, lawyers, former clients of the firm, and personal contacts seeking their securities brokerage business.
The Paine, Webber office was on the southwest corner of Ventura Blvd and Petit. One afternoon a yellow De Tomaso Pantera parked directly in front of the office by a fire hydrant. (the De Tomaso Pantera was an Italian sportscar running a Ford drivetrain, and quite exotic at the time, even by Southern California standards) Out stepped a young white guy with a red Afro, wearing a Carnaby Street suit and platform shoes, and an overcoat that he wore like a cape!
He walked into the office, saw I was the only one accessible, and walked over and sat in my client chair.
I was 27 years old, and I figured he was five or so years younger. “I want to trade commodities,” he announced.
Trading commodities is the most volatile of securities trading, and the most lucrative for brokers. The rule of thumb is that a commodities client will generate annual commissions to the broker equal to the amount of the initial opening investment deposited in the trading account.
Paine, Webber had a minimum requirement of $10,000 to open a commodities account. A broker could thus expect $10,000 in gross commissions in the first year of trading, with half that amount going to the broker himself. I had no commodities clients, although I was licensed to deal in commodities in New York and Chicago. Sitting in front of me was a $5,000 raise!
I had the guy fill out the requisite forms and application and took them to my boss, the office’s manager. Chuck Graham, who had hired me, eyed my new client with disdain. “He looks like a flake,” Chuck muttered. “Tell him we need $25,000 to open an account.”
“Please, Chuck,” I implored. “This is five grand to me.”
Graham told me to get rid of him. “We don’t need any fucking hippies in here.”
I went back out to my desk and told my guest, George, that my boss was an asshole, that he jacked up the opening balance requirements because he didn’t like what he looked like, and apologized that we couldn’t do business.
Without a word, George got up, walked out of the office, and peeled off with the De Tomaso’s tires laying rubber.
About an hour and a half later, the De Tomaso again parked at the fire hydrant. George walked into the office and dropped a cashiers check on my desk. $25,000!
I retrieved his application from the trash can, scooped up the check and burst into Graham;s office. I handed him the check and George’s application.
“Sign it,” I demanded!
Chuck Graham held the check in one hand and George’s application in the other. Slowly, his eyes opened wide and his jaw dropped. “Who the fuck is this guy?,” Chuck asked. He handed me the check. It wasn’t a check for $25,000, it was for $250,000!
And George turned out to be George Giannini, grandson and grandnephew of the founders of the Bank of America!
Over dinner I described my incredible day to my wife. “George Giannini? Red hair?”, she asked.
Thus began a 44 year friendship, interrupted by several business relationships.
George’s multi-million dollar Malibu house was a shack! He had a few mattresses, bean bag chairs, a bare lightbulb which hung in the bedroom, and a fridge stocked with Dom Perignon.
Do you remember the 1989 flick Weekend at Bernie’s? That was George’s! Frequent non-stop parties, naked people, lots of beer, tequila, and champagne for George. I spent as much time there as I did at my office.
George’s parents were both killed in an automobile accident. He and his sister inherited the family Beverly Hills estate. When they sold it, George bought the Malibu Colony house with his share.
I had expected that George’s initial quarter of a million dollar account would net me $125,000 the next year. Back in 1973 that was serious money. But George was convinced that soybeans were a short. I remember him telling me “Barges full of soybeans are stacked up on the Mississippi!” So we sold several hundred contracts of soybeans, which then locked the limit up for weeks! George was losing $10,000 per day and I was earning no commissions!
When the bloodbath was over, George wanted to trade stocks. He brought me a printout of thousands of shares of blue chip stocks. “Whaddya think?’, he asked me. “What is this?” I asked. The printout was of the holdings of several Giannini Trusts, managed by the Bank of America.
This was just before the stock market went into freefall in 1975. I was a bear on almost everything, and told George the Trusts should be in cash and short term bonds and Treasuries.
George called the investment management department at BofA and demanded that they liquidate most of the portfolio and go into cash and Treasuries.
The account manager in charge of the Trusts blew George off, telling him he had no say in the management of the Trusts and not to bother him again.
In response, George hired a major LA law firm to break the Trusts. He learned that the Trust settlement documents provided that the beneficiaries (including George) had the power to appoint investment management of the Trusts.
George set up Giannini Financial Corporation. I was by then a registered investment adviser, and George hired me to manage the Trusts. Along with Richard Famiglietti and Robert Holzhauer, two other Paine, Webber stockbrokers, and me, George turned GFC into an alternative investment house, specializing in gold and silver, bulk coins, bullion, and numismatic investments.
One afternoon, George called me into his office. He had been in discussions with a representative of Adnan Khashoggi, the Saudi arms dealer.
Khashoggi wished to have Giannini act as a straw buyer of the Fairmont Hotel in San Francisco. The hotel was owned by Ben Swig, a prominent San Francisco personality and businessman, who wanted to sell the Fairmont, but who refused to sell it to an Arab.
Khashoggi would pay the $74 million that Swig was asking for the hotel, plus ten percent to GFC for acting as his straw buyer. Famiglietti, Holzhauer, and I would each get one million dollars!
Khashoggi arrived the following day, accompanied by two bodyguards, in a bullet-proof Mercedes limousine. We finalized the deal and George and I flew to San Francisco two days later. George got a letter of credit from the bank and we presented our offer to Ben Swig. George and Swig shook on the deal and turned the matter over to their attorneys to complete and close.
Swig pulled out of the deal a week later. The grapevine had it that George was bragging about fronting for Khashoggi and was overheard. The Fairmont has changed hands several times since. In 2015 it was sold to a Korean investment group for $450 million.
George tended to be influenced by whomever he had most recently spoken with. On one occasion he announced that he was buying a factory ship for processing shrimp. “Shrimp are dying of old age in the Philippines!” Despite all of our reservations and concerns, George nonetheless bought the ship. Turned out it needed retro-fitting and had to be towed to San Diego. George sued the sellers, the ship languished at the docks, running up exorbitant dockage fees and was eventually seized.
For almost 40 years George was the head football coach at Montclair Prep, and compiled a stellar record with never having had losing season. When my son, Mac, was playing Pop Warner, George scouted him and convinced him to go to high school at Montclair. Mac loved him, and played his heart out at Montclair as both an offensive and a defensive tackle.
Among the friends Mac made at Montclair were David Hasselhoff’s daughter, Hayley, and Burt Reynold’s son, Quintin.
Montclair Prep closed its doors in 2012, the same year George was diagnosed with ALS (amyotrophic lateral sclerosis), also known as Lou Gehrig’s Disease. He can no longer speak and is confined to a wheel chair, just like cosmologist Stephen Hawking. Understandably depressed, George was given a new lease on life when one of his former students sent him this letter.
George, Richard Famiglietti, and I have remained friends these 44 years. We lost our fourth Musketeer, Bob Holzhauer, to a massive heat attack twenty years ago.
After GFC, we each went our own way. I became a lawyer and a professional political strategist, George returned to coaching football, Richard set up a mortgage company.
For awhile, we were soaring to the stars! It was a wild ride, George!
Love you, my brother!