A new hedge fund aiming to raise $2 billion wouldn’t be particularly noteworthy in itself. But when the name behind the venture— DSK Global Investment Fund—is former IMF chief Dominique Strauss-Kahn, as the Wall Street Journal reports, it’s news.
A brief recap of Strauss-Kahn’s checkered past: On track to be the Socialist candidate in the 2012 French presidential election, Strauss Kahn (who became widely known by his tabloid moniker, DSK) was accused of sexually assaulting a maid at New York’s Sofitel in midtown Manhattan in 2011. DSK, who was married at the time, would eventually admit to a sexual encounter with the Sofitel maid, though he claimed it was consensual. Criminal charges against DSK were dropped, and he ultimately reached a civil settlement with the maid.
But the allegations forced him to resign from the IMF and gained him international notoriety. (When all was said and done, Radio France Internationale estimated (in French) that reports of the charges had appeared in some 150,000 newspapers around the world.) And the racy allegations didn’t end there. Last summer, DSK was ordered to stand trial on charges of “aggravated pimping” in connection with an alleged prostitution ring based in the French city of Lille. DSK’s lawyer has said his client “denounces the absurdity” of the allegations, which could earn him 10 years of jail time if he is convicted when he goes on trial with other defendants later this year.
Strauss-Kahn’s resume may be a tad unsavory for some potential hedge fund clients. But one shouldn’t underestimate him. He sits on the board of Russia’s biggest oil company, Rosneft, and calls Russian President Vladimir Putin a comrade. (Of course, given Putin’s recent adventures in Ukraine, that fact may do more harm than good.)
DSK isn’t the first in finance to mount a comeback. Here are a few other financial types who have tried to resurrect their careers after being sidelined by scandals (though none of these have faced the kind of lurid allegations associated with Strauss-Kahn):
- Dick Fuld, the CEO at the helm during Lehman Brothers’ epic collapse, emerged to run the consultant firm Matrix Advisors in 2009.
- Dubbed the “unacceptable face of banking” in the UK, Bob Diamond was ousted from Barclays as chief executive after an embarrassing rate-rigging scandal in 2012. He launched a merchant investment bank called Atlas Mara Co-Nvest Ltd. (paywall) last year.
- John Thain’s reputation was tarnished after he spent $1.22 million decking out his offices at Merrill Lynch while he was CEO, including an $87,000 an area rug, $28,000 curtains, and $87,000 for a pair of chairs. Although he shepherded the merger of Merrill with Bank of America in 2008, he was forced out amid anger (paywall) over his lobbying efforts to score lucrative bonuses for Merrill execs even as the firm teetered. Thain has emerged to become the head of commercial lender CIT Group.
- Former Citigroup CEO Vikram Pandit was ousted (paywall) from the sprawling global bank after clashing with the firm’s regulators and its board. Pandit bought a stake in an Indian financial services firm JM Financial last year, and last month he launched a new firm (paywall), TGG, meant to help advise firms on improving their corporate culture.
It remains to be seen how well these new ventures—or DSK Global Investment Fund—will fare over the long term. But if you’re looking to launch a second act after a rough run in your career, finance may be the place to do it.