Prophet-and-Loss-1

Prophet and Loss

A manic money manager with a lust for celebrity, Dana Giacchetto played with Leo and Ben, Cameron and Courteney, while their millions were in safe keeping with his Cassandra Group. But when the party spun out of control, Giacchetto was the last to get the message.

(New York, February 28, 2000. Photo: Condrea Schorr)

“WILL EVERYONE JUST SHUT UP!” The Times Square ball had dropped, and a minute into the millennium, Dana Giacchetto was struggling to quell the pandemonium in his 3,000-square-foot SoHo loft. Clutching a microphone in one hand and a paperback anthology of Greek plays in the other, the beleaguered money manager had planned to mark the occasion by reading a few portentous words to the 50 guests at his New Year’s Eve party. But Giacchetto, who had named his Cassandra Group investment firm after the unheeded prophet, refused to start until his guests were focused on him.

“Just read and they’ll shut up,” advised a woman in black. Anxiously tugging at his Dolce & Gabbana T-shirt, Giacchetto launched into a passage from Aeschylus’ Agamemnon, in which Cassandra declares that despite the machinations of her enemies, her legend will endure. “I am not like a bird,” he intoned, “scared at an empty bush, trembling for nothing. Wait: When you shall see my death atoned with death . . . then witness for me — these and all my prophecies were utter truth.”

The performance, an observer would later note, was “pure Dana,” a melodramatic tour de force that the 37-year-old Giacchetto intended as a rebuke to his ever-widening circle of antagonists. But most of the revelers, distracted by the televised vision of Dick Clark hugging a blonde, missed the analogy. Smiling weakly at the scattered applause, Giacchetto returned to D.J. duty, no doubt recalling that at last year’s bash, it was rapper Q-Tip who was on hand to oversee the music. This time, Giacchetto told a guest, Q-Tip “couldn’t make it.” Neither could Winona Ryder, Matt Damon, Johnny Depp, or Ben Affleck, all of whom had been present last year. In fact, the lone celebrity in attendance was Alanis Morissette. “You know I’ll never leave you,” the singer cooed, wrapping her arms around her host. “You don’t have to worry about me.”

Dana Giacchetto was never the biggest money manager on Wall Street, but by the late nineties, the baby-faced broker was certainly among the most visible. Operating at the nexus of Wall Street and Hollywood, his SoHo-based Cassandra Group claimed to manage $400 million in assets for celebrities on both coasts. At one point, his client list ranged from brat packers like Tim Roth, Cameron Diaz, and Tobey Maguire to art-world stars like Ross Bleckner and David Salle to musicians like Morissette and Michael Stipe. Uniformed in Prada and Helmut Lang, his pet cockatoo perched on his shoulder, the darling of CNBC’s Squawk Box became a tabloid staple along with his clients. Courteney Cox flew him home to meet her parents. Leo DiCaprio took him to Cuba. Michael Ovitz whisked him around Italy on his yacht.

Then, last autumn, the wunderkind whom GQ named the Rock-and-Roll Broker found himself in free fall. All summer long, there was growing buzz in New York and Hollywood that Giacchetto was in trouble. In early October, he was suddenly dumped by two of his closest allies, his partners in a $100 million venture-capital fund backed by Chase Manhattan, triggering a wave of defections from his money-management firm. On December 4, the Los Angeles Times broke the news that top clients were defecting because of undefined financial irregularities, and the article triggered a stampede: Seventeen clients left during a single week.

But the worst blow was the suicide of his friend Jay Moloney in November. Against the advice of friends, Giacchetto had installed the talented but notoriously troubled agent as president of Paradise Music and Entertainment, a company Giacchetto funded with millions of his clients’ dollars. Unable to overcome his addiction, Moloney had quietly stepped down last August; on November 16, he hung himself in the shower stall of his home. The night before Moloney’s death, Giacchetto spent an hour on the phone with a “Page Six” reporter tearfully trying to kill an item about the agent’s relapse.

“Jay’s death nearly destroyed me,” Giacchetto says. In the month after Moloney’s funeral, he stopped going into the office and taking phone calls. Instead, he spent most of his time holed up in his apartment weeping over his mounting losses, both personal and professional. Then, just as his friends were planning an intervention, Giacchetto suddenly bounced back. “You can only lie back and take it for so long,” he says. “At some point, you have to fight fire with fire.”

Which is why, on a bitterly cold afternoon in January, Giacchetto is entertaining a reporter in his loft. Four minimalist couches form a square in the middle of the airy living room where his friend Leo once played video games before DiCaprio’s attorney sent Dana a letter tersely cutting off all contact.

Keeping Dana company today are his new girlfriend, a pair of hyperactive cockatoos, and a newly hired publicist, Peter Brown, a sober, white-haired Brit who once represented the Beatles. “I thought about it a lot, how all this could happen to me,” he says. “You know, one day you’re on top of the world, and the next, everyone’s pissing on you.”

Even dressed in a conservative blue suit, he comes off like a precocious schoolboy, shifting in his seat and pulling on his hair as he makes the case that his troubles are a product of a “conspiracy” engineered by his former partners. “This was a power play,” he tells me. “A campaign of misinformation against me by people I trusted. By people I thought were my friends.”

The friends in question are Jeffrey Sachs and Sam Holdsworth, who were joined with Giacchetto in Cassandra-Chase Entertainment Partners, a $100 million venture-capital fund.

On December 13, Giacchetto filed suit against Sachs, Holdsworth, Chase, and another Cassandra-Chase associate, Robert Egan, charging that they had conspired to eject him from the partnership by ruining his reputation. The suit seeks $100 million in damages and the full dissolution of the Cassandra-Chase partnership, plus repayment of $600,000 Giacchetto says he laid out in rent and expenses.

In his suit, Giacchetto charges that about a year ago, Sachs and Holdsworth started “intentionally, willfully and maliciously” spreading false rumors about him to Hollywood insiders such as DiCaprio’s lawyer Steve Warren. He charges that Sachs told Warren and others that Giacchetto “was going to get arrested,” that he was being investigated by both the SEC and the FBI. As a result, the suit continues, DiCaprio terminated his account at Cassandra.

“I’ve heard all kinds of slanderous rumors,” Giacchetto says. “That I’m going to jail. That I’m about to be indicted. It’s all lies! It’s all so dark, I don’t want to believe it’s true.”

Holdsworth and Sachs declined to discuss the charges, but their attorney, former governor Mario Cuomo, who was once Sachs’s boss, filed papers last Friday asking the court to dismiss Giacchetto’s suit. They claim Giacchetto’s allegations are baseless and his problems self-created; they also demand repayment of $950,000 loaned to Giacchetto when his troubles began.

In any case, it seems the manic money manager’s troubles are far from over. New York has learned that the Securities and Exchange Commission recently spent six weeks poring over Giacchetto’s books. A former vice-president at Cassandra was interviewed by the U.S. Attorney’s office about alleged criminal activity at the Cassandra Group. The government’s inquiry, says a source close to the situation, centers on charges that Giacchetto misdirected client funds and misled clients about the amount of money in their portfolios. Giacchetto angrily denies reports of any such investigation. The U.S. Attorney’s office declines to comment.

But even his staunchest critics doubt he profited personally from his actions. After all, he considered himself an artist, serving creative soulmates. The consensus seems to be that at some point, Giacchetto, by all accounts a savvy and accomplished investor, lost his way, and unwilling to let down his high-profile clients, struggled to cover his tracks. “This is a naïve individual with very good intentions who simply went out of control,” says one associate. “Dana didn’t know how to put the brakes on, because he only has an accelerator.”

Dana Giacchetto was raised in the Boston suburb of Medford, the oldest son of middle-class parents. His first business enterprise was selling magazines door-to-door when he was 11. “The very first door he knocked on, the woman said no and he ran back home crying,” recalls his father, Cosmo, a real-estate broker. “I had to tell him, ‘They’re not rejecting you; they’re rejecting what you’re selling.’ Dana is a real hustler, but he feels bad when people say no.”

After showing early promise on the piano, Giacchetto took lessons and faithfully practiced on the family’s upright thirties Fischer. By the time Dana was in his teens, he was staging concerts by his pop band in the family rec room and recording their songs on an eight-track. “He should have made it as a rock star,” sighs his father. It wasn’t for lack of trying: At the University of Massachusetts in the early eighties, Giacchetto fronted two successive bands that drew a large following in Boston. But his rock career never really took off.

Instead, Giacchetto landed a job as an analyst for the white-shoe Boston Safe & Deposit Company, trading by day and playing gigs late into the night. In a scathing article last December, the New York Observer reported that the company had no record of his employment there. But a spokesman for Boston Safe confirms that Giacchetto was employed there full-time from 1980 to 1987; his former boss, Donna Wong, now works as a systems analyst at Cassandra. The Observer was also unable to find any record of the business courses Giacchetto claimed he took at Harvard. As it turns out, Harvard does have a record of Giacchetto’s attendance, but the courses were at Harvard’s extension school, not its prestigious business school, as he had claimed.

When Giacchetto left Boston Safe in 1987 to strike out on his own, many of his devoted clients followed suit. Cassandra targeted creative types with a simple pitch: Since artists, actors, musicians, and filmmakers are paid only sporadically for their work, they require specialized investment strategies. Giacchetto’s approach was long-term, ultraconservative. “I never started Cassandra thinking, I want to make tons of money,” he says. “I started it because I really believe that most of the creative people I knew were ill-advised and didn’t have any resources. I thought I could help them find a safe way to grow their money.”

Though he’d given up performing, he still thought of himself as an artist, with money his new medium. “When I meet money managers who tell me they’re technicians, or it’s about science, that’s bullshit,” he says. “You don’t know if a stock is going up or down tomorrow. It’s an art, just like writing a song or doing a painting.”

To woo his artsy clients, he and his then girlfriend, Artemis Bradford Willis, held dance parties on the rooftop deck of his Back Bay apartment and followed up with a monthly newsletter that offered investment tips along with gallery listings and art reviews. By the early nineties, he was one of the best-known brokers in Boston, but typically, he was restless. Packing up his spreadsheets, client lists, and even the family’s Fischer piano, Giacchetto moved to New York, and from his loft on Lafayette Street he began his most ambitious assault.

After relentlessly cold-calling the powerful Pace Wildenstein Gallery, he wrangled an audience with its influential president, Marc Glimcher. Amused by the quirky hustler, Glimcher took Giacchetto under his wing, introducing him to art-world players like George Condo and Bleckner, who became his earliest clients.

It was his personality as much his business acumen that drew people to Giacchetto. “He’d stare adoringly into your eyes, loving everything you said,” notes a former client. “He has this wonderment that disarms people. An innocence he exudes.”

By 1995, he had charmed his way to the core of New York’s downtown demimonde. “I met him at this birthday dinner for André Balazs,” says another acquaintance. “There was James Truman, Lee Radziwill, and Dana. He was sitting across from this famous gossip columnist and telling him all about this money-management fund he’d started for musicians and artists who were friends of his.”

On long weekend visits, Giacchetto set his sights on Hollywood, where he networked his way through a daisy chain of parties and premieres to the office of golden-girl producer Stacey Sher (Pulp Fiction, Get Shorty). Sher hung out with the under-30 crowd and dated a personal manager named Rick Yorn, who soon became one of Dana’s closest friends.

Though most of Hollywood was paying Yorn little attention at the time, Giacchetto sized up the young manager’s client base and recognized its potential. At the time, Yorn and his sister-in-law Julie Yorn had a lock on many young stars, including Cameron Diaz, Jennifer Lopez, Ed Burns, Matt Dillon, and Leonardo DiCaprio. In the face of Giacchetto’s charm offensive, says one friend, “Rick didn’t have a chance. Not only did Yorn invest his money with Cassandra, but he also encouraged each of his clients to do so as well.”

Helped along by a spirited bull market, Giacchetto promised — and frequently delivered — returns of 40 percent and more for his clients. “Whatever he’s doing, he’s doing well for me,” Courteney Cox gushed to the Post. “Every time everyone’s panicking about the stock market going down, I just say, ‘Go, Dana.’ “

As his clients’ portfolios took off, so did Giacchetto’s cachet. He earned a reputation as someone who could put the right people in the right room — usually his own loft. What he wanted to create more than an investment club, he says, was a salon of his generation’s most important artists, writers, actors, and musicians. It was a “community,” Giacchetto says, where ideas could cross-pollinate between rock and painting, movies and performance art, and Giacchetto would play matchmaker. Indeed, in 1994, he put together a deal that would stagger the industry — and reveal a sharp edge to Giacchetto’s laid-back demeanor.

That year, Seattle’s influential Sub Pop record label, which had nurtured such seminal grunge acts as Soundgarden and Nirvana, was looking for a major distribution deal. Acting as a high-paid auctioneer, Giacchetto frantically worked his Rolodex, talking up the label to David Geffen and Microsoft. “He’d have these meetings and say, ‘If you don’t want it, I’ve got three other people ready to take it right now,’ ” says a source close to the deal. “Then he’d turn around and start dialing the phone. He was a great negotiator that way. It’s a certain magic and balls and timing.”

After igniting a seven-month bidding war, Giacchetto delivered 49 percent of Sub Pop to Warner Music for $20 million. “That was just a phenomenal deal,” says another insider. “The company was worth a couple million. That deal made people look at him in a whole new light.” As reports of his deal-making abilities spread, other labels came calling — followed by modeling agencies, hoteliers, magazine publishers, and movie studios. “I had an incredible amount of power,” he says. “I could deliver anyone to anyone with one phone call.”

Though she stuck with him throughout his rise, by 1998, the relentless networking eventually got to his longtime girlfriend, Artemis Willis. The couple sparred often and loudly over his “need to hang with the right crowd,” says one pal. “Artemis couldn’t stand the people around him. The constant name-dropping and social climbing started to wear her out.” Finally, she moved out.

By all accounts, Giacchetto was devastated by the breakup, but his friends helped take away some of the sting. Prime among them was DiCaprio, who, by early 1998, was practically living in Giacchetto’s loft. “Leo would wander down around noon, check the Bloomberg, make some calls, and they’d go out to a long lunch,” recalls one former Cassandra trader. “Or Gwyneth would come by, and it was all hugs and kisses and ‘Love ya, babe.’ He was developing this whole cult of personality.”

Though he was a decade older than some of the guys in DiCaprio’s posse, at night Dana gamely played Pied Piper through the city’s downtown club scene, from Cafeteria to Moomba to Veruka and back again. “He was out a lot,” recalls a friend. “He’d always be asking, ‘Where do we go next?’ This was at two in the morning.”

Eventually, however, his frenetic socializing took a toll. Sometimes Giacchetto didn’t show up to work until 1 p.m., and he became less interested in the day-to-day operation of the Cassandra office, which had by then descended into comic disarray. He bought two cockatoos, one for himself and another for DiCaprio, which he allowed to fly loose through the office. Visitors would find the two birds, Tiberius and Angel, perched on the office’s Bloomberg machine, chewing at the wires.

Clients complained that their monthly statements arrived chronically late, or not at all. After a couple of bad deals, including a disastrous foray into the now-bankrupt Iridium, many of them suspected that he was more concerned with maintaining his social profile than with monitoring their investments. His blatant self-promotion had also become an increasing liability. Sources close to Matt Damon and Ben Affleck say the actors decided to pull out because they thought Giacchetto was trading on their names for his own benefit. Another client, Ed Burns, followed them out the door for the same reason. “When Dana began showing up on ‘Page Six’ more than I did, I knew it was time to get out,” he told a friend.

By now, Giacchetto was even dropping the names of clients he didn’t have. He once showed a friend a spreadsheet with Steven Spielberg’s name on it and claimed to be managing $7 million for the director. A source familiar with Spielberg’s finances firmly denies he invested any money with Giacchetto. When informed of this, his pal laughs. “I knew that,” he says. “Dana never thinks you’ll like him enough.”

Giacchetto denies he ever talks out of school about his clients and insists that complaints about his social life are wildly overblown.”Look,” he says, “I party, but mostly it was business. I’m not like a drug addict or anything. Far from it. I was here working my balls off every single day to make money for my clients and put deals together, and the proof is there. I finished all these deals. It’s not like a smoke screen. I mean, I really did them. I’m really good at that.”

Amid the circuslike environment, news that Giacchetto had taken on a new associate was greeted with some relief at Cassandra. A soft-spoken 47-year-old Richard Gere look-alike with an impressive political pedigree, Jeffrey Sachs was supposed to provide the ballast in Cassandra’s flighty offices. Born to a Conservative Jewish family in the Five Towns and trained as a dentist, Sachs instead went into public service, landing high-profile jobs under governors Hugh Carey and Mario Cuomo.

Along the way, he developed a wealth of influential contacts. A close friend of John Kennedy Jr.’s (he was supposed to have been a passenger on JFK Jr.’s tragic last flight but canceled when he feel ill), he also helped Andrew Cuomo found help, the younger Cuomo’s affordable-housing initiative.

At the time he and Giacchetto first discussed teaming up, Sachs was heading up a thriving consulting business that offered strategic planning for health-care groups, financial firms, and entertainment conglomerates, including Time Warner and NBC. “My biggest talent,” he says, “was to make this happen or make that go away.”

The two had known each other socially for a number of years, but by the summer of 1997, tired of consulting, Sachs says, he decided “to get into more transactional activities.” He had heard a lot about Giacchetto’s deal-making skills during the sale of Sub Pop to Warner Music and was impressed by his manic energy.

For his part, Giacchetto thought that if he fused his personal contacts with Sachs’s institutional ones, they could build a powerhouse. To sweeten the arrangement, Giacchetto says, Sachs promised to deliver him a money manager’s pot of gold, a lucrative pension fund from the state’s health-and-hospital-workers’ union, which was being run by Sachs’s friend Dennis Rivera. (Sachs denies this.) Though the fund never materialized, in the summer of 1997, Giacchetto invited Sachs to move his operation into Cassandra’s offices, where he joined former Billboard publisher Sam Holdsworth — who would use his connections to look for promising entertainment start-ups — and his old boss’s son, Chris Cuomo, who would “lawyer” the deals.

In the beginning, at least, the partnership went as planned. Several months after arriving at Cassandra, Sachs introduced Giacchetto to his friend Mitchell Blutt, a high-powered executive partner at Chase Manhattan Corporation’s $2 billion venture-capital unit. Sachs knew that Blutt’s division, Chase Capital Partners, was hungrily looking for alliances to help identify potentially explosive start-up companies in the entertainment field. Enter Dana.

In March, Giacchetto began squiring Chase’s buttoned-up investment bankers around the tables of Moomba, where between Cosmos he and Blutt talked about putting together a partnership. Their first joint venture was a deal to underwrite the Standard Hotel in Los Angeles, a project of Giacchetto’s friend André Balazs, who also owned the Chateau Marmont and New York’s Mercer. Then, on October 9, 1998, Giacchetto, Blutt, Holdsworth, and Sachs formed Cassandra-Chase Entertainment Partners, a venture-capital firm backed by $100 million from Chase. The fund’s main objective was to ferret out entertainment start-ups and get a first look at the projects conceived by Giacchetto’s famous clients. The partners stood to earn 15 to 20 percent of each venture.

Despite the Chase funding, not all was well between the partners. From the start, Giacchetto says, Sachs had trouble adjusting to Cassandra’s hypercasual atmosphere. And to Cassandra’s employees, who had prided themselves on their outlaw attitude toward corporate America, Sachs and his buttoned-up team seemed suspiciously old guard. Sachs told Giacchetto he needed to hire people who were more professional. In November 1997, on his recommendation, Giacchetto hired as Cassandra’s vice-president Soledad Bastiancich, a Yale-educated lawyer who had worked at the conservative Allen & Company. She is the girlfriend of John Howard, a multimillionaire Bear Stearns venture capitalist and a close friend of Jeff Sachs.

Though she was charmed by her madcap boss, Bastiancich was alarmed at the lax operation he ran. Backed by Sachs, she persuaded Giacchetto to authorize a $250,000 audit of Cassandra. Bastiancich later outlined her concerns in a confidential four-page letter obtained by New York, which included a list of demands that Giacchetto had to meet if he wanted to keep her on. It’s a strange document, which veers from fawning regard for Giacchetto’s “vision” to anger over his shortcomings. “For all I know,” she writes, “you may spit on this letter and tell me you never want to see me again (though I pray you don’t ever feel that way).” She signed it with a smiley face.

The letter, which Giacchetto twice denied to me even existed, provides a glimpse inside Cassandra’s chaotic offices and reveals an internal struggle over its future. In it, Bastiancich asks Giacchetto to “promise me that you will check with one of us about a client’s account value and holdings prior to telling the client. TCG has had several hundred thousand dollars worth of trade errors during the past couple of years. We simply cannot afford anymore sic. It is okay not to always have awesome news.”

She also complained that the company was paying Giacchetto’s personal travel and entertainment expenses and had been making personal loans to clients that were not “professionally papered and at market rates.”

Giacchetto denies that he lied about client accounts, and he says that his expenses were normal for someone who traveled frequently with clients. How about the trade errors? I ask. “Yeah, we had trade errors,” he sighs. “There are always errors in trading, but I don’t think I had any major problems. You call and say, ‘Buy me 500 shares of Merck,’ and somehow they’d buy 400 instead. That’s a trade error. That’s what she’s addressing. But I don’t think that’s bad or negative or shocking. Soledad wanted power. All of them wanted power. They got in and they thought, I can do this better than you, because Dana’s so flighty and creative and we’re these top management people.”

In fact, Bastiancich was seeking an equity stake in the company and asking to be named president, with the power to run daily operations and draw up a “conservative” budget to make the company profitable. Giacchetto angrily refused. She left Cassandra a few months later to write a novel.

Bastiancich and Giacchetto’s partners in Cassandra-Chase were especially troubled by Giacchetto’s involvement in a struggling firm called Paradise Music & Entertainment. In 1998, the company, which produced music videos, commercials, and albums, was about to be de-listed from the nasdaq because its assets were so dismally depleted. To Giacchetto, the company, little more than a shell operation at the time, presented a tempting opportunity. He agreed to pump $6 million of client funds into Paradise to rebuild it into a powerful indie force that would serve as a vehicle for his clients’ projects. “It was a shell where I thought I could bring together the kinds of things I always wanted to bring together,” Giacchetto says. To run the company, he tapped Jesse Dylan (son of music legend Bob Dylan), a respected commercial producer and a Cassandra client. As president he chose his old friend Jay Moloney, who had, after several attempts at sobriety, been clean for months.

Skittish because of Moloney’s drug relapses and rumors of earlier suicide attempts, some clients hesitated to bankroll Paradise, and even Moloney’s friends worried that the pressure would send the fragile agent over the edge again. “He could barely hold a job,” one friend notes, “much less run a public company.” Equally troubling was Giacchetto’s stake in the venture. The money manager was given a consultant’s title and paid in stock options worth $1.2 million. What made the arrangement problematic was that Cassandra traders were advising clients to trade shares in a company about which their boss possessed inside information.

Large financial firms install barriers between investment bankers and traders to prevent insider trading, but in Giacchetto’s seven-member office the potential for abuse is enormous. “There was a potential conflict,” Giacchetto says. “Absolutely. We were very careful. It’s completely disclosed in the SEC filings that I owned stock. Everyone knew I owned it.” John Heine, a spokesman for the Securities and Exchange Commission, says he can’t comment on this case, but insists the issue is not clear-cut. “There’s a possibility that his being a consultant and selling shares is a conflict of interest. Simple disclosure may not be enough.” Giacchetto denies ever breaking any SEC rules. “If there was someone who has proof that I had, my former so-called partners would have picked it up during the first six months of this torture and put me in my grave.”

By now the partners were also clashing over the operation of the Cassandra-Chase fund. Time and again, Giacchetto complains, Sachs and Holdsworth shot down deals he brought them involving major stars — all of whom were Cassandra clients. There was Danny DeVito, looking for funding for an Internet start-up. There was Ovitz, wanting to put together a film-distribution company. There was DiCaprio, Martin Scorsese, and Q-Tip, who jointly planned to set up a film company. Finally, there was Larry Bathgate, the powerful former finance chair of the Republican National Committee, who had agreed to back a $20 million merchandising firm called Artists Marketing Corp., which would market the names and likenesses of such stars as DiCaprio in the lucrative overseas markets. (The AMC deal, which was killed when Bathgate was informed that Giacchetto had used his clients’ funds as collateral, a charge Giacchetto denies. It also antagonized Ovitz, whose management company handles DiCaprio.) “Why didn’t they do those deals?” says Giacchetto. “I don’t know. It was ridiculous. They wanted the glamour of having me tromp all those celebrities through the door of Chase, but they didn’t want to work with my clients.”

Sachs responds that deals brought in by other partners were frequently turned down as well. “For every hundred deals we looked at, maybe we’d do one,” he says.

But Giacchetto believes that once they had used him to establish the partnership, Sachs and Holdsworth decided they no longer wanted him around. In early October, several clients and their attorneys began calling Giacchetto, he says, claiming that Sachs had told them disturbing things about Cassandra. At first, Giacchetto says, he didn’t want to believe that Sachs had turned on him. “But people started calling me and saying, ‘This guy is not your friend. He’s trying to destroy you.’ And I said, ‘Why? Why?’ ” His face reddens perceptibly and his voice grows shrill. “The only answer I have is that he didn’t understand my business and thought there really was bad stuff going on. I don’t know. But there wasn’t. And there isn’t.”

On October 21, his partners moved out of the office without informing Giacchetto and set up shop directly across the street. A few days later, Giacchetto received a terse letter informing him that he was being removed from the partnership and his one-third interest in the venture would be reduced to about 8 percent. “Dana went apeshit,” a colleague says. “He kept crying and yelling that he’d pay them back.”

Giacchetto filed his lawsuit a month later. “I think they hoped we’d all separate and I’d keep my reduced interest and life would go on. I’d be mad for a few days, but they’d keep the fund and I’d keep my clients and everything would be wonderful,” says Giacchetto. “They were wrong.”

Three weeks ago, Giacchetto hired a Greenwich money-management firm to shape up his back office but then promptly dismissed it because he feared its owners were trying to take advantage of his recent troubles. “They wanted too much control and access to the star clients,” he says. “And I’m never going to give that away again. “

In the meantime, Giacchetto says, he’s back in the game. He has hired two new portfolio managers for his office; one of them, he lets slip, is Chloë Sevigny’s brother. He says four of the seventeen clients who bolted last fall have returned to his firm. Eager to show that he’s curbed his penchant for name-dropping, he won’t say who they are. He also says he’s currently in talks with two banks about backing a new venture-capital fund.

Last week, Giacchetto even surfaced at a screening of his old friend DiCaprio’s movie The Beach, where he wandered the aisles kissing old friends. But when the house lights dimmed and he went in search of a seat, none was vacant. He wound up sitting cross-legged on the floor, right up against the screen.

Giacchetto’s New Year’s performance notwithstanding, the mythological character he’s often compared to these days is not Cassandra but Icarus, who got burned flying too close to the sun. “I just had a suspicion it wouldn’t last,” says one intimate. “He was flying too high, had too many people signing on. You knew that if anything ever went wrong, they’d all start jumping ship. He was a New York Magazine article waiting to happen.”