Lenny Dykstra: Amazin' Fall From Grace
- Joshua M Brown
- May 2nd, 2009
Updated: Dykstra files for bankruptcy 7/8/2009 - NY Daily News
This story came out a week ago or so, but I had to let it percolate a bit before writing it up...
I grew up going to Met games at Shea with my father and I was 9 years old in 1986 when the Met's had one of the greatest championship seasons in the history of professional sports.
We loved all of the players that year, including Darryl Strawberry, Keith Hernandez, Mookie Wilson, Roger McDowell, Dwight Gooden, Gary Carter and even Wally Backman.
But the fan favorite, the guy who people went wild for at the plate and in the field, was Lenny Dykstra. He was so tough and aggressive, they called him Nails and I even had this poster up in my bedroom:
OK, looking back, I feel a little funny about having a shirtless dude hanging over my bed...we'll discuss that another time.
Today, we're going to talk about the recent ESPN.com profile, "Dykstra's Business: A Bed of Nails" that details the rise and fall of Lenny as an "investment guru".
Written by reporter Mike Fish, the article puts you in the action as Dykstra blows off creditors, twists his victims' claims against him into character assassinations, and makes statements so disturbing in their non-authenticity, you will wonder whether Lenny Dykstra is a sociopath, a pathological liar, an arch criminal or just mentally ill.
I'm hoping for the latter to be the case.
Here's an image of Lenny now, in his office:
And here are a few quotes so you get an idea about what we're dealing with:
"It's about living the dream, bro," he says.
"People invested with me made 250-large last year. That's $250,000," Dykstra says.
"No, dude, the f---ers want more money," Dykstra says about the lawsuits and the debts. "Dykstra has all the money."
So, how bad have things gotten in Lennyland?
The lawsuits suggest that one of two things is going on here: Either Lenny hates to pay his bills, or he's a financial train wreck.
Just in the past two years, Dykstra has been the subject of at least 24 legal actions, including 18 since November. Three suits hit the courts on Jan. 29. He's been sued by publishers and print companies, by three different groups of pilots and by a Maryland-based financial and litigation consulting firm that offered expert testimony on his behalf in an earlier lawsuit. He's even been sued by a die-hard Mets fan who was the best man at his wedding 20-some years ago.
The majority of these suits seem to stem from Dykstra's inability to pay off debts and his go-for-broke spending on luxuries.
One of Dykstra's main avenues of attention was on TheStreet.com where he made deep-in-the-money call option recommendations to subscribers for $995.95 a year. Jimmy Cramer did once tout Dykstra on the site, but I give him a pass on that as he's from Philly and was probably more a fan of the baseball career of Lenny Dykstra than anything else.
As Michael Comeau reported, Lenny was relieved of his options newsletter gig at TheStreet.com last week after the bad press became too much for the site to deal with (you can't have a potential fraudster giving investment advice in this day and age):
Lenny’s “Nails on the Numbers” newsletter has been renamed “Deep-in-the-Money Calls” and is now written by options-market star and all-around nice guy Jon Najarian. I can’t say I’m surprised at this turn of events. While Lenny was a major profit-generator for TheStreet.com, the bad press was starting to make Lenny more trouble than he’s worth.
The irony is they put another ex-pro athlete on that newsletter, Jon Najarian, the legitimately successful founder of OptionMonster.com and former NFL hard-hitter you see on TV all the time. Unlike Dykstra, Najarian has a real expertise in both options and media relations.
The extent of Dykstra's options expertise is unknown, as is the extent of his borrow-and-blow-off routine, so maybe he could do a newsletter about that instead.
He claims to be worth $60 million, but bankruptcy seems more likely if even half of the suits currently against him go the other way. Comeau's take?
"Lenny’s going bankrupt. How do I know? It’s simple. I’ve never met a rich person that tried so hard to look rich.
How large and out-of-his-means does Lenny live?"
His life beyond baseball includes acquisitions such as hockey legend Wayne Gretzky's old house ("the best house in the world," Dykstra says) in Thousand Oaks, Calif., which he bought for $18.5 million. He drives a black Rolls Royce Phantom with an extended wheelbase, and hires pilots to fly him around in his Gulfstream II jet. He lets drop that he's chartering a jet to Cleveland later tonight to size up another Gulfstream.
The ESPN article gets more and more out of hand the longer it goes on. Dykstra has ripped off his mother and brothers, has launched a magazine aimed toward giving pro athletes financial advice, got into bed with AIG on an annuity joint rep, bounced 6 figure checks on the design firm who was working on his mag, ripped off a doctor on a car wash deal, failed to pay his law firm for fielding all these suits and has resorted to borrowing from people personally:
Dykstra borrowed $250,000 from New York literary agent David Vigliano last May with an agreement to repay him $300,000 in November -- a robust 40 percent annual percentage rate. Vigliano filed suit after Dykstra didn't come up with the money.
This guy has completely gone off the deep end. If you haven't read the ESPN piece yet, see the link below for the whole story. As someone who worshipped the ballplayer, its awfully sad to see what he's gone on to make of the rest of his life and career.
Full Story: Bed of Nails (ESPN)
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The Reformed Broker is a blog about financial markets and the economy. Joshua Brown is a New York City-based investment advisor for high net worth individuals, charitable foundations, retirement plans and corporations... More.