Peter J. Eichler Jr.'s company, Aletheia Research & Management… (Photo illustration by Alicia…)
Two years ago, Peter J. Eichler Jr. was one of the most successful men in Southern California.
His money management firm ranked among the largest in Los Angeles, with high-wattage clients such as Goldman Sachs Group Inc. and JPMorgan Chase & Co. And he fashioned a lifestyle that was sumptuous even by the gilded standards of Wall Street.
Eichler paid himself $33 million one year. He owned five homes. He had a fleet of luxury cars, including a $320,000 chauffeur-driven Maybach. He shuttled to and from Europe in private jets.
Eichler socialized with tennis star Andre Agassi, talked shop with billionaire investor Ron Burkle and had Wolfgang Puck cook dinner at his home.
Today, Eichler's Santa Monica investment firm is shutting down and his highflying lifestyle has been grounded.
His company, Aletheia Research & Management Inc., filed for bankruptcy after a wave of client defections and two investigations by the Securities and Exchange Commission. His $230-million net worth has shriveled. The chauffeur and chartered jets are gone.
Even in an industry notorious for its flameouts, Aletheia's demise was fast and painful.
"It's very unusual to see a firm rise so much and then fall so quickly," said industry veteran Michael Rosen at Angeles Investment Advisors in Santa Monica.
It's a jarring reversal for a man who spent years scaling to the top of Southern California's financial pyramid — and made the most of the bounty it provided.
"I sold most of my homes and most of my cars and I had to adjust, and it wasn't easy," Eichler said.
The firm was done in by the SEC investigations, slumping investment performance, and bitter clashes between Eichler and two key business partners that became an embarrassing sideshow.
After mounting tension, Eichler fired Roger Peikin, Aletheia's co-founder and finance chief. Eichler also fought Proctor Investment Managers, a New York firm that bought 10% of Aletheia in 2006, over dividends that Proctor claimed it was owed.
Peikin and Proctor hit back with blistering lawsuits. Peikin portrayed Eichler as brutish and dictatorial, describing their relationship as "open warfare."
More damaging, Peikin and Proctor accused Eichler of charging millions in personal expenses to Aletheia to fund an indulgent lifestyle.
"Eichler has fleeced Aletheia of virtually all of its cash, not only by paying himself tens of millions of dollars through grossly excessive compensation ... but also by using Aletheia's treasury to pay for a stunning array of his personal, non-business-related expenses," Proctor said in its suit.
There was $500,000 for a European family vacation, up to $18,000 a night for hotel suites and $250,000 for wine, his adversaries argued in court documents and testimony. Eichler charged jewelry, shoes, groceries — even music from iTunes — to the company, according to Proctor's suit.
Eichler gave himself 34 bonuses in the 12 months before his firm filed for bankruptcy in November, according to papers Aletheia filed in court.
A $28,000 bonus Aug. 23 was followed by $135,000 the next day. Eichler gave himself nine bonuses that month, including three in one day. The final payout came less than a week before the firm filed for bankruptcy.
Proctor's suit is scheduled to go to trial in May. A trial date has not been set in Peikin's case.
Eichler denied wrongdoing, but the soap opera plot lines sparked an exodus among Aletheia's conservative clientele.
"It never occurred to him that it would all come crumbling down the way it has," said longtime friend James Canales.
'A lot of wrongs on both sides'
In a nearly four-hour interview at his Pacific Palisades home, Eichler, 55, spoke animatedly as he discussed the downfall of his company.
Clad in jeans and a short-sleeved shirt, he denied the accusations against him, saying they were lodged by disgruntled former partners bent on revenge.
In the interview, as in court records, Eichler accused Peikin of mismanagement. He also said Peikin was on a vendetta to bring down the firm after his ouster. And Proctor, he said, failed in its mission to drum up business for Aletheia.
Aletheia collapsed, Eichler said, because of bad publicity from the lawsuits and the $19-million cost of defending against them.
"Nobody should have to deal with some of the things I had to deal with," Eichler said. "I put my heart and soul into something, and some other people wanted to destroy it. It's sad."
Eichler and Peikin were caught up in "a contest of alpha males," said Betsy Sanders, a longtime friend of Eichler who worked at Aletheia.
"There's a lot of wrongs on both sides," Sanders said. "It's just a lot of crap between two people."
Friends described Eichler as strong-willed and occasionally polarizing, but well-intentioned with employees' best interests at heart.
"I don't think that he gets that he can be off-putting," Sanders said, but added that Eichler "really cares about people and what happens" to them.