Buddy Fletcher: Financial Genius — or a Fake?
Young, African American, and rich, Buddy Fletcher was a dream alumnus for Harvard—a Wall Street philanthropist who gave millions to endow professors and support civil rights. And then his whole world came tumbling down.
Fletcher threw himself into university life, finding a residence in Adams House, the most artistic and socially avant-garde of Harvard’s houses. In what was considered a more conservative move, though, he also joined the ROTC program at MIT (Harvard did not then allow ROTC on campus). Fletcher was popular. He was funny, considerate, and polite — almost excessively polite, some people thought. And at a school where African-American students often felt marginalized, he seemed determined to fit in. He was “punched” for membership in the Phoenix-S.K., one of Harvard’s exclusive finals clubs, and as a junior was voted its president. The following year, the entire senior class elected him their first marshal, foremost among the eight seniors who helped organize class events.
After graduating in 1987, Fletcher moved to New York to take a job at the investment bank Bear, Stearns. His mentor there was a partner named Elliot Wolk, one of the firm’s most powerful financiers. “He worked for me for two years,” says Wolk, who retired in 1997 but still keeps in touch with Fletcher. “He’s extremely smart and has a very pleasant personality — he was an extremely good salesman.” Wolk recalls that he taught Fletcher equities trading, and Fletcher’s job was to find opportunities to implement it.
Apparently, he was good at his job: After two years, Fletcher’s salary and bonus totaled $160,000. (He used some of his earnings to help pay the tuition of his brothers, who’d followed him to Harvard.) But Fletcher “didn’t think $160, 000 was enough,” Wolk says. In 1989 rival firm Kidder, Peabody offered him a job trading for them. Fletcher told colleagues that Kidder had promised him a $100,000 base salary and 20 to 25 percent of any profits he generated. He was 23 years old.
By his own account, Fletcher was an instant success at Kidder. His first year there, he generated an astounding $25.5 million in net profits for the firm. With his 20 percent cut, he was expecting a bonus of $5 million — well on his way to becoming Kidder’s second-highest-paid employee.
But Kidder balked at paying Fletcher the bonus he expected, and accusations soon began flying. In 1991 Fletcher resigned. Then in June of that year, he sued Kidder, charging the firm with racial discrimination. “Kidder determined that the amount it was obligated to pay Mr. Fletcher was simply too much money to pay a young black man,” Fletcher said in his complaint. “Kidder’s management [was] determined to put Mr. Fletcher in his place….” Fletcher wanted nearly $30 million in damages.
Kidder representatives have never previously spoken publicly about the lawsuit, but Granville Bowie, who was then Kidder’s human resources manager — and one of the targets of Fletcher’s racial discrimination suit — told me that the real story was very different: The firm said no to paying the bonus because Fletcher had refused to tell anyone just how he was generating those electronic profits.
According to Bowie, Fletcher claimed that although he was trading with the firm’s money, his trading strategies were his and his alone. “Fletcher had a business that…frankly, we didn’t know what it was, and we didn’t know how it was making money,” Bowie says. “He took the position, ‘I’m making money…go away.’” That attitude made the young trader’s supervisor, managing director Thomas Ryan, nervous. Were Fletcher’s profits for real?
In 1992 a New York Stock Exchange arbitration panel denied Fletcher the damages he claimed, awarding him a relatively modest $1.26 million, and later another arbitration panel dismissed the racial discrimination suit. The arbitration award wasn’t really a victory for Fletcher, but the story that emerged in subsequent media reports was less nuanced: On Wall Street, went the narrative, even Harvard grads get discriminated against if they happen to be black. Buddy Fletcher, though, had fought back.
In 1997, Fletcher got some revenge when his younger brother Todd staged an off-Broadway musical based on the Kidder, Peabody battle. Titled Julius Caesar: The Fall and Rise of a Wall Street Star, Todd’s play, which Buddy helped finance, told the story of a black chief executive of a securities firm called Rome, Inc. who is murdered by white business partners.