Red Notice | Bill Browder

Summary of: Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice
By: Bill Browder

Introduction

Embark on a thrilling journey through high-stakes finance, political machinations, and one man’s quest for justice in ‘Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice’ by Bill Browder. This summary reveals the astonishing story of a man who leveraged his financial prowess to uncover corruption and greed in post-Soviet Russia. Be prepared to dive into the murky world of Russian privatization, the rise and fall of oligarchs, and the harsh realities of living in a country where corruption and risks seemingly lurk around every corner. Browder’s bravery, persistence, and commitment to the cause of justice make this a gripping and inspiring read.

From Communism to Capitalism

Bill Browder, an ex-Salomon investment banker, spotted a gap in the Russian market to invest before others. He became an unlikely hedge fund manager, investing in oil, energy, and the phone business. Russia was monitoring its property, and without a stock market, there were many loopholes for insiders to manipulate the system. Browder’s firm invested $25 million in Russia, multiplying its value five times. However, he soon grew disillusioned with his work and left to set up a hedge fund in Moscow. Despite not speaking Russian, he managed to set up shop, and his Hermitage fund was quickly taken up by billionaire investors.

Challenging Oligarchs in Russia

Bill Browder, an American businessman, challenged the corrupt practices of Russia’s oligarchs using his muckraking approach. He invested in an oil company with preferred shares that paid hefty dividends and common shares that paid none, and the Hermitage Fund gained significantly during the 1996 presidential election. Browder also took an $11 million stake in an oil company called Sidanco, which he calculated was cheaper than investments in BP or Lukoil. However, Sidanco’s billionaire owner, Vladimir Potanin, double-crossed him by diluting its shares, and Browder challenged him. As a result, Browder received threats to his life and moved to London to be with his son. The Hermitage Fund had huge returns in 1997, but the Asian financial crisis caused its value to plummet by 90%. The crash changed the game for oligarchs, producing a massive wealth gap in Russia.

The Rise and Fall of Hermitage Fund

Browder’s investigation into Gazprom’s corrupt activities and subsequent fallout with Putin resulted in the rise and fall of the Hermitage Fund in Russia.

Bill Browder, a hedge fund manager, exposed Gazprom’s fraudulent sell-off of gas fields at massive discounts, resulting in the removal of their CEO. Afterward, the new CEO set out to recover stolen assets, which set Gazprom’s shares soaring and made it Hermitage Fund’s most profitable investment, and encouraged Browder to investigate other corrupt companies. Putin supported Browder’s investigation but later arrested the CEO of oil firm Yukos, which initiated a divide between Putin and Browder. In 2005, Russian officials detained and expelled Browder from Moscow, citing him as a national security threat, causing him to liquidate his $4.5 billion fund and relocate his employees out of Russia. The aftermath of the situation saw Russian officials launch criminal investigations on Browder’s operations, forcing him to launch the Hermitage Global Fund in 2006 for other emerging markets.

Russian Government Target: Bill Browder

After discovering that companies he previously owned were stolen and used to fraudulently claim a tax refund, Bill Browder embarked on a mission to uncover the truth. His investigation led him to track the money trail to the southern burg of Novocherkassk, then to Moscow’s Khimki suburb where the three firms received the largest tax refund in Russian history, amounting to $230 million. Browder relayed his findings to The New York Times and discussed them on an independent radio show in Russia. Despite the absence of arrests, Browder’s enemies attempted to silence him by demanding that Hermitage’s Russian attorney report to the police for questioning and threatening to take him by force. Due to his well-placed friends, the attorney was informed that his life was in danger, which compelled him to hide for weeks before escaping the country. Browder’s experiences revealed the ruthless nature of the Russian government and the potential dangers of going against it.

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