Chatham Asset Management, a hedge fund operator that owns the National Enquirer and is under review by securities regulators, is adding a general counsel who was previously a government enforcement attorney, according to a company memo.
Daniel A Goldfried, a white-collar litigator at McGuireWoods LLP, will soon join Chatham as its only in-house lawyer, according to the private memo reviewed by Bloomberg News. Chatham, which owns a majority of Enquirer parent American Media, has been farming out legal work to outside firms, its investor presentations indicate.
Chatham hasn’t been accused of wrongdoing by authorities. It declined to comment. McGuireWoods and Goldfried, who is expected to become the firm’s general counsel, didn’t respond to requests for comment.
In recent years, traders have privately criticized what they see as lofty valuations of illiquid securities in Chatham’s portfolio. At least one former executive of a company backed by Chatham has accused it of manipulation. After Chatham counter-sued, the matter was resolved.
Federal regulators have been asking questions, too. The inspections division of the Securities and Exchange Commission recently started an examination of Chatham, inquiring about its relationships with brokers and how they value debt, people familiar with the firm have said. That comes as regulators apply increased scrutiny to bond funds across the market.
The firm, which invests mostly in high-yield debt, has taken large positions in print media. It has at least a $400 million stake in American Media, and one of its executives sits on American Media’s board. A Chatham analyst also serves on the four-member board.
American Media entered into a non-prosecution agreement last September and agreed to help prosecutors investigating the Enquirer’s involvement in facilitating hush payments during the 2016 election cycle to women claiming extramarital affairs with President Donald Trump.
That agreement could come under pressure after Amazon.com Inc. founder Jeff Bezos, a frequent subject of Trump’s ire because he owns the Washington Post, accused the Enquirer of blackmailing him after it learned that he was having an affair.
It’s not known whether the hiring of Goldfried, a former SEC enforcement attorney, is related to those matters. After his government work, he spent a decade in-house representing Bank of America Corp. and its Merrill Lynch unit in compliance and enforcement matters, according to his McGuireWoods biography.
Philip Aidikoff, a Beverly Hills, California, attorney who represents wealthy investors, said it’s common for hedge fund managers to hire attorneys with backgrounds like Goldfried’s.
“They could be thinking ahead a few moves,” he said, “looking for someone with the sort of background that enables him to communicate at a high level with whoever’s on the other side of the table.”