Jump to content

John D. Arnold

From Wikipedia, the free encyclopedia
(Redirected from Centaurus Advisors, LLC)
John Arnold
Born
John Douglas Arnold

1974 (age 49–50)
Dallas, Texas, U.S.
EducationVanderbilt University (BS)
Occupation(s)Philanthropist and Co-Founder of Arnold Ventures LLC
SpouseLaura Muñoz
Children3

John Douglas Arnold (born 1974[1]) is an American philanthropist, former Enron executive, and founder of Arnold Ventures LLC, formerly the Laura and John Arnold Foundation. In 2007, Arnold became the youngest billionaire in the U.S.[2] His firm, Centaurus Advisors, LLC, was a Houston-based hedge fund specializing in trading energy products that closed in 2012.[3][4][5][6][7][8] He now focuses on philanthropy through Arnold Ventures LLC. Arnold is a board member of Breakthrough Energy Ventures and since February 2024, is a member of the board of directors of Meta.[9]

Early life

[edit]

Arnold was raised in Dallas, Texas, and he was the younger of two sons. His mother was a teacher and would later work as an accountant at Centaurus.[4][10] His father was a corporate lawyer and died when Arnold was 18.[4][10] At 14, he started his first company selling collectible sports cards called Blue Chip Cards.[2] He completed high school at Hillcrest High School in 1992.[1]

A 1995 graduate of Vanderbilt University, he completed a degree in mathematics and economics in three years.[10] He is a member of Lambda Chi Alpha.[11]

Career

[edit]

After college, he began his career at Enron as an oil analyst, but soon was promoted to assistant trader in the oil trading group.[10] In 1996, less than a year after starting at Enron,[10] he moved to oversee the trading of natural gas derivatives at the Natural Gas Desk upon the departure of Jeff Bussan.[12] Using their new Internet-based trading network, EnronOnline,[citation needed] [13] his trading book is credited with making three quarters of a billion dollars for Enron in 2001 and he was rewarded with the largest bonus in Enron history, some $8 million.[10][14] His former colleagues dubbed him "king of natural gas."[15][16] When Enron collapsed, he was not accused of any wrongdoing.[17] Nevertheless, during a deposition on 5/6/2005 Arnold was deposed by Antara Resources focusing on Arnold's possible manipulation of information used for gas price indexes. In response to questions about market manipulation, Arnold invoked his right against self-incrimination under the Fifth Amendment.[18][19]

He then founded Centaurus, a hedge fund, with his previous year's bonus and two other investors in 2002. He was widely quoted for his viewpoints on the industry by a government commission.[20]

During the collapse of Amaranth Advisors, Centaurus is widely credited as being one of the major players on the other side of their position, returning as much as 150% in 2005.[21] August 2008, Centaurus acquired around 10% of the shares of National Coal Corporation (NCOC).[22][23]

In 2009, Arnold gave a public speech to the U.S. Commodity Futures Trading Commission (CFTC), in which he opposed limits on financially settled trading positions but supported limits in the physical energy futures as they near expiration.[24][25] Arnold announced his retirement from running the hedge fund on May 2, 2012.[4][5][6][7][8] Centaurus had an average annualized return in excess of 100% across this 10 year run.[26]

Other interests

[edit]

In 2019, Arnold became the chairman of Houston's 2026 bid for the FIFA World Cup.[27]

Philanthropy

[edit]
Main article: Arnold Ventures LLC

Arnold started donating to the Knowledge Is Power Program (KIPP) in 2004 with a gift of $30,000 which was then based in Houston, and two years later he and his wife pledged $10 million to help KIPP expand to other cities.[28] Other multi-million gifts followed to other education programs, for example to Washington, D.C. city schools for merit pay, to Teach for America, and to StudentsFirst.[28] Arnold has also given to The City Fund, an organization focused on growing the number of charter schools in the USA, and its political arm, Public School Allies.[29]

The Laura and John Arnold Foundation was a private foundation founded by Arnold and his wife Laura.[30][2] The organization was founded in 2008.[31] In 2008, the Arnolds were original signatories of the Giving Pledge,[32] a pledge by some high-net-worth individuals to donate the majority of their income to philanthropic causes during their lifetimes.[33] From 2010–2013, the Arnolds were heavily involved in the Innocence Project which led to their interest in criminal reform.[34] The Foundation is focused on evidence-backed giving for systematic change.[35][36]

In 2013, the Arnolds donated $10 million as a private donation to the National Head Start Association after the United States federal government shutdown of 2013 had closed the pre-K Head Start programs.[37]

In October 2018, it was reported that Arnold had spent more than $100 million in health-care related grants since 2014, with a particular focus on reducing pharmaceutical drug costs.[38] Arnold funds Institute for Clinical and Economic Review (ICER), a nonprofit that created a formula to price drugs. Those who support ICER’s formula believe it could lower prices while critics argue that the formula is discriminator toward the elderly and those with disabilities or rare diseases.[39] Arnold also has been an influential supporter of Democrats’ efforts to pass a drug-price reform bill.[40]

In 2019, the organization was transformed into a limited-liability company composed of the former foundation, a donor-advised fund, and the Action Now Initiative advocacy organization, effectively combining philanthropy, research, policy, and advocacy efforts.[35] The new entity is known as Arnold Ventures LLC with the charter "to remove barriers between data and decisive action, working swiftly across the policy-change spectrum."[41]

In 2019, Arnold spoke out against donor-advised funds (DAF), criticizing them for delaying charitable giving and promoting giving to institutions that are less likely to need the money.[42] He proposed that foundations and DAFs should spend at least 7% annually, which would result in billions of dollars more being given to charities,[35] and that DAFs should be legally held to an annual minimum distribution.[43]

In 2020, Arnold was one of ten billionaires who had given away at least 20% of their wealth.[44]

Controversies

[edit]

Arnold Ventures LLC has invited criticism with its involvement in many controversial areas. They are on record as agreeing with some of the critiques and focus on partnering with organizations to maximize their impact without undue influence.[35] The former foundation was sued over a pre-trial web tool by the family of a victim who was murdered, but the District Court and a U.S. Appellate Court dismissed the complaint.[45][46]

Arnold Ventures' 2020 grant to trial aerial surveillance hardware by the Baltimore Police Department was subject to legal challenges but in November 2020, a federal appeals court ruled that the program was constitutional and did not invade the rights and privacy of city residents.[47]

Arnold’s foundation, Arnold Ventures, created a Public Safety Assessment which gave recently arrested individuals a score to determine their flight risk and potential bail. The NAACP and ACLU have criticized the Arnold PSA because they believe risk assessment tools actually increased the number of prisoners under the guise of criminal justice reform.[48]

John received an $8 million dollar bonus from Enron just before the company filed for bankruptcy. It was the largest cash bonus ever distributed by the company. Arnold was described as "unapologetic" for his success in Enron’s final days. Arnold was not criminally charged with any wrongdoing at Enron, but he was named in a bankruptcy lawsuit by other Enron staff.[49][50]

Arnold has been accused of pushing for pension reform in response to a lawsuit the California state pension system, CalPERS, filed against Enron.[51] Through his foundation, Arnold has aggressively promoted pension reform in the state of California based on a study his foundation conducted with Pew that failed to mention that Enron or the overall financial crisis contributed to the shortfall.[52]

John Arnold and his brother Matthew[53] tore down historical homes in the River Oaks neighborhood of Houston which led to criticism by architectural conservationists.[54]

Personal life

[edit]

Arnold is married to Laura Elena (Muñoz) Arnold, a Yale graduate who had worked as a mergers-and-acquisitions attorney and had co-founded an oil exploration company in Houston.[55] They have three children.[56]

References

[edit]
  1. ^ a b "Billionaire John Arnold explains support for DISD home rule". The Dallas Morning News. 2014-03-28.
  2. ^ a b c Apple, Sam (January 22, 2017). "The Young Billionaire Behind the War on Bad Science". Wired.
  3. ^ Ahmed, Azam (2012-05-03). "John Arnold Is Said to Close Hedge Fund and Return Investor Money". The New York Times. Retrieved 2020-10-15.
  4. ^ a b c d "When a billionaire trader loses his edge - The Term Sheet: Fortune's deals blogTerm Sheet". Finance.fortune.cnn.com. 2012-05-04. Archived from the original on 2013-09-20. Retrieved 2013-10-08.
  5. ^ a b "Houston billionaire trader John Arnold retiring at 38 - Houston Chronicle". Chron.com. 2012-05-02. Retrieved 2013-10-08.
  6. ^ a b Kate Kelly (2012-05-02). "Legendary Energy Trader John Arnold to Retire". CNBC. Retrieved 2013-10-08.
  7. ^ a b Kroll, Luisa. "Hedge Fund Billionaire John Arnold's Fund Was Up When He Announced He Was Getting Out". Forbes. Retrieved 2013-10-08.
  8. ^ a b "Ex-Trader at Enron to Retire From Hedge Fund". Online.wsj.com. Retrieved 2013-10-08.
  9. ^ Vanian, Jonathan (2024-02-14). "Meta says Broadcom CEO Hock Tan is joining board of directors". CNBC. Retrieved 2024-02-14.
  10. ^ a b c d e f New York Times: "CORPORATE CONDUCT: THE TRADER; Enron Trader Had a Year To Boast of, Even If..." By DAVID BARBOZA July 09, 2002
  11. ^ "Lambda Chi Alpha - Notable Alumni". lambdachi.org. 2013-08-14. Archived from the original on 2014-08-15. Retrieved 2013-10-08.
  12. ^ "A speculator who is in for the long haul". Financial Times. May 14, 2008. Retrieved October 8, 2020.
  13. ^ "Great Sites: EnronOnline". InformationWeek. 24 August 2001. Retrieved 2020-10-09.
  14. ^ New York Times, "Energy Trading, Post-Enron", January 15, 2006
  15. ^ Vardi, Nathan. "The King Of Natural Gas Quits". Forbes. Retrieved 2013-10-08.
  16. ^ Demos, Telis (2009-11-24). "Centaurus's John Arnold: The king of natural gas - Nov. 24, 2009". Money.cnn.com. Archived from the original on 2013-12-13. Retrieved 2013-10-08.
  17. ^ Seidman, Andrew (26 July 2018). "Meet the Texas billionaire who backed Philly soda tax — and now is funding attack ads in N.J. Senate race". Inquirer. Retrieved 2020-12-10.
  18. ^ "6 May 05 - Deposition of John Arnold of Enron | PDF". Scribd. Retrieved 2024-08-05.
  19. ^ Dreyfuss, Barbara T. (2013). Hedge hogs: the cowboy traders behind Wall Street's largest hedge fund disaster (1. ed.). New York, NY: Random House. ISBN 978-1-4000-6839-5.
  20. ^ "House report" (PDF). Retrieved 2020-11-25.
  21. ^ Tett, Gillian (2006-12-20). "Smart trades that made this a good year for some". FT.com. Retrieved 2013-10-08.
  22. ^ [1]Houston Business Journal, "Centaurus scoops up National Coal shares" August 29, 2008
  23. ^ "Centaurus scoops up National Coal shares". www.bizjournals.com. 2008-08-29. Retrieved 2020-12-29.
  24. ^ Demos, Telis (2009-11-24). "Centaurus's John Arnold: The king of natural gas - Nov. 24, 2009". Money.cnn.com. Retrieved 2013-10-08.
  25. ^ "John D. Arnold's CFTC (U.S. Commodity Futures Trading Commission) speech" (PDF). Cftc.gov. Retrieved 2013-10-08.
  26. ^ David Rubenstein (2024-08-14). Bloomberg Wealth: John Arnold. Retrieved 2024-08-15 – via YouTube.
  27. ^ Hill, Glynn A. (2019-01-10). "Houston's World Cup bid adds a power player in John Arnold". HoustonChronicle.com. Retrieved 2020-11-02.
  28. ^ a b Preston, Caroline (October 16, 2011). "A Thirtysomething Billionaire Couple Take on Tough Issues Via Giving". Chronicle of Philanthropy.
  29. ^ Barnum, Matt (2020-02-21). "The City Fund has given out over $100 million to support charter and charter-like schools". Chalkbeat. Retrieved 2020-11-23.
  30. ^ Lev Facher, Lev, "How a billionaire couple greased the skids for Nancy Pelosi’s drug pricing bill, Stat News, November 26, 2019
  31. ^ Piper, Kelsey (2019-02-07). "Why this billion-dollar foundation is becoming a corporation". Vox. Retrieved 2020-12-18.
  32. ^ "Has the Giving Pledge Changed?". Philanthropy. 4 June 2019. Retrieved 2020-12-18.
  33. ^ Preston, Caroline (October 16, 2011). "A Thirtysomething Billionaire Couple Take on Tough Issues Via Giving". Chronicle of Philanthropy.
  34. ^ Moxley, Abby Schultz and Mitch. "Changemakers: The Leaders Reshaping Communities Around the World". www.barrons.com. Retrieved 2020-11-05.
  35. ^ a b c d "Two Texas Billionaires Think They Can Fix Philanthropy". Bloomberg.com. 2019-12-12. Retrieved 2020-11-16.
  36. ^ Moxley, Abby Schultz and Mitch. "Changemakers: The Leaders Reshaping Communities Around the World". www.barrons.com. Retrieved 2020-12-18.
  37. ^ Emma, Caitlin (2013-10-07). "Philanthropists pledge for Head Start". POLITICO. Retrieved 2022-08-05.
  38. ^ Loftus, Peter (2018-10-21). "A Billionaire Pledges to Fight High Drug Prices, and the Industry Is Rattled". Wall Street Journal. ISSN 0099-9660. Retrieved 2018-10-21.
  39. ^ Roland, Denise (4 November 2019). "Obscure Model Puts a Price on Good Health—and Drives Down Drug Costs". Wall Street Journal. Retrieved April 28, 2021.
  40. ^ Facher, Lev (2019-11-26). "How a Billionaire Couple Greased The Skids For Nancy Pelosi's Drug Pricing Bill". Stat News. ISSN 0099-9660. Retrieved 2019-11-26.
  41. ^ Candid. "Laura and John Arnold Foundation to Restructure as LLC". Philanthropy News Digest (PND). Retrieved 2019-06-10.
  42. ^ Schleifer, Theodore (2019-07-25). "Why one billionaire is calling out Silicon Valley's favorite philanthropic loophole". Vox. Retrieved 2020-11-16.
  43. ^ "Are Donor Advised Funds Good for Philanthropy? It Depends On Who You Talk To". Worth. 2019-10-30. Retrieved 2020-11-16.
  44. ^ "How we Ranked Forbes 400 based on their giving". Forbes. Retrieved 2020-11-02.
  45. ^ Wing, Nick (31 July 2017). "Dog The Bounty Hunter Joins Lawsuit Against Chris Christie Over Bail Reform". Huffington Post. Retrieved 6 March 2020.
  46. ^ "June Rodgers v. Christopher Christie, No. 19-2616 (3d Cir. 2020)". Justia Law. Retrieved 2020-12-09.
  47. ^ "A divided federal appeals court rules Baltimore's surveillance plane is constitutional, cites city's struggles". news.yahoo.com. 6 November 2020. Retrieved 2020-12-09.
  48. ^ Whitlock, Kay; Heitzeg, Nancy (21 November 2019). "Billionaire-Funded Criminal Justice Reform Actually Expands Carceral System". Truthout. Retrieved 16 June 2021.
  49. ^ Barboza, David (18 June 2002). "Officials Got a Windfall Before Enron's Collapse". New York Times. Retrieved April 28, 2021.
  50. ^ Facher, Lev (26 November 2019). "How a billionaire couple greased the skids for Nancy Pelosi's drug pricing bill". Stat. Retrieved April 28, 2021.
  51. ^ Mulligan, Thomas (2 February 2002). "CalPERS Doubted Enron Partnership". Los Angeles Times. Retrieved 16 June 2021.
  52. ^ Taibbi, Matt (26 September 2013). "Looting the Pension Funds". Rolling Stone. Retrieved 16 June 2021.
  53. ^ Anspon, Catherine D (18 July 2017). "Storied Texas Mansion Completely Demolished: The Bulldozer Brings Down Houston's Greatest Architect". PaperCity Magazine.
  54. ^ "Big and Modern on Lazy Lane: John Arnold Tries House Trading | Swamplot". swamplot.com. 12 April 2009.
  55. ^ Lori Williams (2008-09-26). "Laura Arnold named to BCM Board of Trustees". Baylor College of Medicine. Archived from the original on 2010-12-26.
  56. ^ "Our Team | Laura and John Arnold Foundation". Arnoldfoundation.org. Archived from the original on 2015-02-08. Retrieved 2013-10-08.
[edit]
Retrieved from "https://en.wikipedia.org/w/index.php?title=John_D._Arnold&oldid=1256674446"