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Hedge fund leader's widow, brothers clash over estate

Date: Tuesday, December 4, 2007
Author: Andrew Ross Sorkin, New York Times

JUPITER, FLA. A life of private jets and black-tie balls ended with Seth Tobias, a wealthy investment manager and a familiar presence on CNBC, floating face down in the swimming pool of his mansion here.

It was just after midnight on Sept. 4 when Tobias' wife, Filomena, frantically called 911. " By the time the police arrived, she had pulled her husband's body to the edge of the pool, where she cradled his head in her arms, sobbing.

Seth Tobias, who was 44 years old, had apparently suffered a heart attack, his brother Spence said at the time. The police did not consider his death suspicious.

Draining the pool

But now an unfolding drama over Tobias' estate is providing a lurid account of fast money and faster living in the volatile world of hedge funds. Tobias' four brothers and Filomena Tobias are locked in a legal battle over the estate, which is worth at least $25 million. And, in a civil complaint, they have gone so far as to accuse her of murder. The brothers, Samuel, Spence, Scott and Joshua, claim Filomena Tobias drugged her husband and lured him into the pool.

Filomena Tobias' lawyers call the claims outrageous. Authorities have not accused her of any crime.

The mystery deepened when it emerged that Filomena Tobias spent $9,628 to have the pool drained and resurfaced days after her husband died, according to documents filed in an unrelated case.

Park Avenue

The accusations have captivated this wealthy enclave north of West Palm Beach and transfixed the investment world in New York, where Tobias ran a $300 million hedge fund from an office on Park Avenue.

"I don't understand why this hasn't ended up on CSI Miami yet," said Jim Cramer, the host of CNBC's stock-picking show Mad Money and Tobias' former boss on Wall Street.

The questions keep piling up, starting with the big one: How did Tobias die? The police in Jupiter have not opened a homicide investigation but are awaiting the results of toxicology tests before making a final determination, said Sgt. Scott Pascarella.

At the center of the dispute is Tobias' will, which designates his brothers as beneficiaries but does not name Filomena Tobias. She contends that she is entitled to the estate because the will was signed before the couple married. In court filings, the Tobias brothers invoke Florida's "slayer statute," which prohibits inheritance by a person who murders someone from whom they stand to inherit. They claim she "intentionally killed" her husband "by asphyxiation and drowning."

Her lawyers, which include her prior husband, Jay Jacknin, have asked the court to put off her depositions because of her "psychiatric condition." They said she hired contractors to empty the pool because she was distraught over her husband's death.

Seth Tobias, a native of Philadelphia, entered this secretive, often volatile corner of the financial world after spending less than a decade on Wall Street, including a stint with Cramer's former money-management firm. He formed Circle T in 1996, with $4 million, and parlayed that into a $300 million hedge fund and brokerage firm. Circle T is in the process of returning investors' funds; clients have not lost money.

Along the way, Tobias collected the trappings of success. He spent days at the Kentucky Derby and nights at Donald Trump's Mar-a-Lago Club. He frequently shuttled by private jet between New York, where he worked in the Seagram Building in Manhattan, and Florida, where he owned two homes.

Tobias made and apparently spent millions of dollars a year, court documents suggest. Outstanding expenses at the time of his death included $52,532 on his American Express Centurion Black Card. His mortgage payment for one of his homes was $35,000 a month.

A small player

But the boyish Tobias never ran with the titans of Wall Street. He was a small player in an industry where successful managers command billions or even tens of billions of dollars. Nonetheless, Tobias managed to make a name for himself on financial-news television.

Now, the hints emerging about his private life have captivated Wall Street. Filomena Tobias told the police that her husband may have been using cocaine on the night he died, according to police reports.