Guru Faces Allegations Of Misdeeds Financial Adviser Accused Of Squandering Millions

He has written how-to books on the risks of investing, syndicates his advice in newspaper columns and is a oft-quoted source for reporters covering the $4.9 trillion Treasury bond market.

So it’s with some surprise that accusations have surfaced against Jay Goldinger, a financial consultant in Beverly Hills, Calif. Two client companies have said his firm squandered tens of millions of dollars they entrusted to him.

There was no indication Thursday that Goldinger is under criminal investigation over the accusations, which emerged earlier this week. But the usually accessible adviser wasn’t answering the phone and his lawyer said he wasn’t available to talk.

Allegations of improper investment activities regularly pepper the financial markets. Nonetheless, Goldinger’s alleged activities seemed particularly out of proportion to his reputation as a dispenser of complex information used by large and small investors.

In addition to his published advice, Goldinger ran Capital Insight, an advisory firm in tony Beverly Hills that tries to make profits for well-heeled clients by investing their money in financial markets.

Some of his investment advice went awry, according to two clients. Pier 1 Imports, the furnishings chain, said this week that an adviser, separately identified as Goldinger’s firm, had engaged in “inappropriate trading activities” that had resulted in a $20 million loss. It said the adviser was managing the firm’s excess cash and short-term securities.

Another client, PairGain Technologies Inc. also said that unauthorized trading by a consultant, also identified as Capital Insight, had cost it millions of dollars in losses.

The Securities and Exchange Commission and the Commodity Futures Trading Commission reportedly have started investigating Goldinger’s firm. Spokesmen at the government regulators declined to comment. Neither agency can bring criminal charges.

Employees at Capital Insight, which occupies a suite of offices and is adorned with original paintings and other art objects, declined to respond to reports the firm was closing. They said Goldinger was not in the office and they referred all questions to his attorney, Brian O’Neill, who said Goldinger was not immediately available.

Bruce Baird, a Washington lawyer and former head of a New York securities fraud unit, was hard-pressed to think of a similar case.

“I can’t think of one recently, certainly not one that’s this high profile,” Baird said.

Goldinger has been quoted in numerous financial stories this year, including more than a dozen Associated Press articles, on the Treasury bond market and the economy, forecasting the direction of interest rates and market events.