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Well well. I've been writing this lovely little piece of Internet real estate called Jr Deputy Accountant for four years and for all the shit I've talked about many a well-meaning asshole over the years, I can't believe it took this long to get threatened by a real lawyer. But it's happened. Francis Koenig's lawyer is coming after me. Somehow I always thought it would be a Federal Reserve lawyer I heard from first, which just goes to prove my friends at the Fed understand I'm harmless and kinda like them at the end of the day, despite my big mouth that might say otherwise.

A bit of background. In April of 2009, I wrote about Francis Koenig's AdultVest hedge fund, which was at that time accused of fraud. I wrote that post based on this FINAlternatives post which is still up today:

Is last year’s most provocative hedge fund launch just another fraud?

Sources close to AdultVest Inc., which manages the Priapus Investment Fund, an adult entertainment hedge and private equity fund, say that it is spending investor money on more than just investments, and that what investments there are don’t account for the returns it claims.

A former investor says that founder Francis Koenig is looting the fund to pay for fine art, expensive wines, cars, personal trips and alimony. Meanwhile, a former employee tells FINalternatives “there was no capital being generated” during his time at the firm. “There is almost no money left in the fund,” the investor, who said he was privy to some of AdultVest’s financials via a court order, alleges. “Koenig has an American Express black card through the company that he uses on partying, girls and high living. Most money is missing and iPorn.com is not worth what he says it is.”

“It just seems to me the whole time I was there that there was no capital being generated,” says the former employee, who left the firm last year because he felt uncomfortable working in an office shrouded with mystery. “And it seemed like money was being spent for things that didn’t need to be bought like cars, clothes and trips,” he adds.

I cannot include the original post I wrote because I have been harassed into taking it down by a Chris Jones, ESQ out of Beverly Hills. Coincidentally, Chris' address as listed at the end of his emails is the same as that of Francis Koenig Construction.

Anyhoo. I wasn't the only one writing about AdultVest at the time and did so only because it involved porn, really, not because I had anything against Francis Koenig. I'm sure he's a nice, smart guy who knows how to make money. No hating there!

Business Insider covered it in April of 2009 as well (link is still live):

Back in January, The Atlantic ran a story about AdultVest -- a hedge fund that claimed an improbable 50% return last year by investing in adult businesses.

We say improbable, because although there's the notion that sin sells in any economy, that storyline has been decidedly busted this time around. Gambling is down. Liquor is down. Porn is even down. Even online porn. So, we wondered, how did AdultVest manage a 50% return?

Here's what we said at the time:

We asked Koenig what, exactly, he's been investing in that's bucked the trend, but he was unwilling to go into much detail. He noted AdultVest bought some porn domain names, which have been appraised at higher values, but which haven't been sold. He also mentioned AdultVest's stake in iPorn -- a startup doing porn for the iPhone. But iPorn hasn't launched yet so any value is going to be difficult to determine.

Until proven otherwise, we're taking this claim of 50% gains with a grain of salt. We've been trained by the last year to be deeply skeptical of notional, mark-to-model values, and when you're talking about valuing assets like iPhone porn startups and unsold domain names, our skepticism ticks up another notch.

But perhaps our skepticism didn't go far enough.

BI later ran an update:

UPDATE: The SEC was invited into Mr. Koenig's company to fully review all accounting and the result was that all funds were correctly accounted for. The SEC in turn closed the case in April 2010, exonerating Mr. Koenig from the said accusations in an official letter.

The January of 2009 Atlantic story, entitled Dirty Sexy Money, was very complimentary of Koenig's venture:

Enter Koenig and AdultVest. He sees the porn downturn as temporary and believes that technological improvements will trigger a turnaround. One example: iPorn, a start-up in AdultVest’s portfolio that is developing an application to deliver porn to the Apple iPod. “The industry’s not going anywhere,” Koenig says. “You’ve got 6 billion people on the planet,” he laughs, “and they’re all horny.” 

However, the kind words didn't stop one Atlantic commenter from writing:

Not very smart, this article......did you do any research for it? Or just regurgitate something read elsewhere?

Koenig has been "gone" for some time, money has disappeared, and even the website isn't there. You might try actually researching an article before writing a puff piece.

And then there's this:

IPorn has closed its offices in Beverly Hills. And it has also dropped out of the AEE show in January because its main investor has allegedly cut off its financial pipeline.

Francis Koenig owner of AdultVest, which owns a piece of IPorn [on paper Mike Weiss is the CEO of IPorn], allegedly went through something like $3.5 million of investors’ money in a two year period, according to the Grand Vizier who leaked parts of this story earlier.

The Vizier says the IPorn offices were for show anyway to impress investors but nothing really was ever done to develop IPorn.

“Everyone involved in IPorn is very upset and all investors will lose their money,” states The Vizier who says that Koenig, who comes from the investment world in New York, formed IPorn as a self-fulfilling sexual fantasy and that Koenig fancied himself as another Rocco and would often make that comparison.

So you could see where a well-meaning girl writing about finance and desperate to make dick jokes might take all that at face value and just regurgitate some news from reliable sources at the time, no? It's all very innocent.

Imagine my surprise when I got an email from a Chris Jones about a month back, purporting himself to represent Francis Koenig, over three years after I wrote that post about money shots and hedge funds. He wrote this:

Dear owner,

Your site is harboring a highly inaccurate and damaging article that has caused many losses to the individual whom it attacks, Francis Koenig.  The accusations were generated by an unscrupulous investor in Mr. Koenig's previous company who attempted to breach his contractual obligations to the company by unsuccessfully filing an un-grounded lawsuit threatening fraud allegations against the company and Koenig.  As a form of retaliation, this investor, having lost his lawsuit, knowingly and willingly launched an attack in the media with the intent of spreading false and slandering statements against the company and Koenig.  The SEC was invited into Mr. Koenig's company to fully review all accounting and the result was that all funds were correctly accounted for.  The SEC in turn closed the case, exonerating Mr. Koenig from the said accusations in an official letter, which is attached.

Your site is currently housing and subsequently accompanying in the costly disparagement of Mr. Koenig.  The publishing of a retraction statement was not enough to fix the issues created by the false statements.  We are now engaged in a full scale to wipe clean the defacing press that has been costly to Mr. Koenig and will do whatever means necessary in order to restore the reputation of Mr. Koenig in the shortest time possible. Suffering through this ordeal has already been difficult and un-fair, but to have these headlines which continue to falsely defame Koenig on the first page of Google under his name is extremely damaging, and cause for immediate action.  We ask your assistance, and your kindness in this matter.  We are requesting that you simply remove the articles before any further action is needed:

Please respond to this address to confirm your removal of the articles below:

[link removed because this a-hole is threatening to sue me over it]

OK. Reasonable lady that I am and reading the email on my BlackBerry at the time, I was more than willing to check out what the SEC had to say. I even offered Chris the opportunity to have his client present his story on JDA. Not once did he offer up the financials for me to check out independent of the SEC so I could write up a glowing story about how awesome they were. Little exists on the Internet today about any action in the last few years since the April 2009 allegations surfaced. In fact, Hedgeho is talking about how great the IPorn acquisition is today:

Koenig has a good track record: The New World Partners hedge fund, where he was a managing director, posted double- and triple-digit returns through the late ’90s – and he thinks similar returns are possible with porn. His funds are set up like any venture capital fund and will invest in a range of businesses, with a portion of each earmarked for buying and running strip clubs.

The overarching strategy is to take majority stakes in businesses that AdultVest will then help manage and consolidate. Koenig won’t say how close he is to raising the total $110 million, but to help the sell, he and his team won’t charge any performance fee until the funds return 100 percent.

“There’s never been big money from the outside,” says Paul Fishbein, president of the leading porn trade tracker, AVN Publications, about the industry. “It’s a logical next step.”

So who cares if there's some old story lingering around on the Internet? Shit happens. He could have simply emailed me to request an edit based on the SEC letter I was not aware of in the three years since I wrote that post but the issue is that this guy has hounded me to fully remove the post and implied that I'm a catty bitch out to get his client. Please. I don't care about Francis Koenig. I wish him all the best.

Once I finally opened the SEC letter, I found more of a shrug off than an actual exoneration.

I didn't know a good way to break this to Chris so I let it go knowing he didn't have a case. I didn't care to investigate myself with the SEC further at the time but now that this guy is threatening me if I didn't remove my post, I have no choice but to FOIA the shit out of whatever they found. I wasn't defaming his client, I was writing based on information I believed to be reliable at the time and making dick jokes. Why come after a fringe financial blog three years after the fact when big guys like Business Insider still had that shit up on their sites? Well he didn't like that. I got the following email tonight:

Adrienne,

It has been nearly a month since our last communication. I have given you ample time to remove the damaging article aimed at my client Francis Koenig. 

I have advised you in writing that this article is outrageous, entirely untrue, and slanderous. I have provided you with evidence showing my client has been cleared. Yet you continue to display this article on your website. 

Your article starts by saying Koenig left Wall Street to "skeeze on the potential in alternative investments" and then references Bernie Madoff as a comparison! These are your baseless and egregious words. 

Your acknowledgement of my prior notice is clear and undeniable evidence of your awareness of the harm your article is causing my client;  Your actions in writing the article;  The ample time I have provided you to remove this article;  And your failure to remove the article after having been advised of the real and punitive damages this article is causing, is further evidence of your intent to continue to harm my client. 

I have advised you of my intention to proceed with both real and punitive damages to the fullest extent. 

I am now writing to inform you that we are preparing to file a lawsuit which will name you personally, your website, and your company, along with others who have also received my warning notice and have failed to take action. 

I am further advising you that your continued failure to remove the article will provide us with continued evidence of your intention to damage my client, and such failure will continue to add to the costs and damages which you have already caused. We intend to pursue these damages to the fullest extent available.

My client did nothing illegal nor unethical to deserve any of this and we are now prepared to stop at nothing to eradicate these outlandish statements. The wheels are now in motion and I assure you this is not a road you want to go down. Had you simply cooperated, you, your company, and your website would not have been named in this lawsuit.

Now, I tried to explain in my response that "skeezing" was a compliment and that I meant no harm. I have removed the post in question because honestly I don't have time for a lawsuit and have cats to feed that are way more important than this but wanted to make it known that I would publish his communications because the Internet will not back down and be threatened into submission. It's fair game, he wrote it. He should have asked for a correction, instead he threatened me with a lawsuit if I didn't make the post go away. He's pretty much bought his client an even bigger headache because now he's crossed me and I have no choice but to investigate the AdultVest matter fully, including pulling in whatever SEC sources I can gather and additional information that wasn't plastered on mainstream media. Sorry, bro, nothing personal, you asked for it. Is he also going after the forum posters slamming his client? Can he make them go away too?

Should have just let it go. Don't tell me what roads I do or do not want to go down, dude, I am all good with my path.

Oh and still waiting for your California bar number, Chris, I believe you have my email. And you still have an opportunity to send me all the AdultVest financials so I can take a look and write up that glowing review. If your client has nothing to hide, I suspect you'll happily take me up on the offer. An innocent misunderstanding and slander are two different things. Wouldn't it have been easier to politely ask me to take it down and try to get me to write up a nice little blurb about IPorn? Too late for that now, I guess.