Hedge fund manager Kyle Bass first made headlines when his prediction of the 2008 subprime mortgage crisis came true, but he has since made numerous bad decisions. Bass founded Hayman Capital Management in 2006 and made a fortune, but that fortune is now in question because of a series of poor financial and ethical choices. The hedge fund manager’s bad decisions are many and wide ranging, but here are just a few of the highlights:
(1) Bass has forged ties with questionable people.
Birds of a feather flock together, and Bass continues to maintain questionable relationships. He has offered praises to Argentinian president Cristina Fernández de Kirchner, who who has damaged her nation’s economy by allowing Argentina to default on its debt a second time. Bass has been a champion of Kirchner, supporting her policies and ignoring the negative consequences. Even though a New York Judge, Thomas Griesa, ruled that Argentina had to pay its creditors, such as Elliott Management, Bass severely criticized Eliott’s Paul Singer and defended Krichner.
(2) Kyle Bass’s firm has become embroiled in a lawsuit.
Kyle Bass had business ties to the late Chris Kyle of American Sniper fame, and Chris Kyle’s widow is currently meshed in a lawsuit with a subordinate of Kyle Bass at Hayman Capital Market. She has accused Bass’s employee of a series of unethical behavior.
3) Bass sought to protect his GM investments by blaming victims for faulty cars.
Fatalities have occurred in General Motors cars due to airbags that have not deployed and faulty power steering, but Bass appeared on television to claim these deaths occurred because the victims were either drunk or not wearing seat belts. This struck many as a sleazy move to protect his own investments.
4) Bass has engaged in short selling pharmaceutical stocks
The hedge fun manager has been accused of targeting pharmaceutical companies by short-selling their stocks and then proceeding to challenge their patents through a front organization called the Coalition for Affordable Drugs. When the stocks consequently go down, Bass profits. Meanwhile, the patients suffer as research is curtailed. The Patent Trial and Appeals Board (PTAB) is considering the possibility of sanctioning Bass for this abuse.
5) Kyle Bass has lost a lot of money.
While it’s not possible to get at Bass’s full financial figures, best estimates are that he lost nearly 30% in 2014, in stark contrast to the successes of other hedge fund managers.
Even while he continues to make poor choices like the four outlined above, Kyle Bass appears on television to offer analysis and investment advice.