ICYMI: Young Westport Financier Leaves Trail of Spectacular Losses: Report

This article previously was published by Westport Patch. We’re republishing it here in case you missed it:

Westport native Alexander Chatfield Burns, while still in his early to mid-20s, amassed a small empire of insurance companies worth tens of millions of dollars on paper, then lost much of it after questions were raised about the financial deals he used to gain control of them and invest their assets, according to the Wall Street Journal.

Burns suddenly left his Southport Lane company offices in Manhattan one day in January 2014 and checked himself into Bellevue Hospital, emailing a friend that he’d had a “nervous breakdown.” He later moved to an apartment in a renovated historic building in Charleston, SC, and he appears to still have money — last fall he bought land at an exclusive resort, according to the Journal.

Burns, who attended Staples High School and may have graduated with the class of 2005, was known as “Lex” at the time (and as “Lexy” when he was at Coleytown elementary and middle schools), according to Dan Woog’s 06880 blog. A friend of Burns’ and Burns’ mother told the Journal he had been something of a financial prodigy as a kid. Burns said he went to Yale and would wear Yale apparel, but the university has no record of him as a student; his resume said he ”began his career” at Twenty-First Securities, but the firm said he was never an employee, the Journal reported.

In 2010, Burns, then 23, launched Southport Lane with several partners, although he was the majority owner. His plan was reported to be buying small insurance companies and putting their assets into better investments. Instead, according to the Journal, which relied on documents filed in court cases, When Southport Lane bought Dallas National Insurance, it paid nothing for the company but agreed to invest $50 million in it. The assets put into the acquired company, renamed Freestone Insurance, were from a “Beaconsfield Holding ABS Trust 2011” created days before.

Southport Lane then bought another insurance company with $25 million in assets taken from Freestone. Other assets from Freestone were put into questionable investments, including rights to a painting purported to be by Caravaggio (although that’s disputed), according to the Journal, citing an investigation paid for by Freestone directors. Some of the investments, the newspaper was told, can’t be traced — including $100 million purportedly invested with a telecom company.

After the investigation, Freestone wrote down $136 million of its assets, making it insolvent. Delaware regulators have moved to liquidate the company.

Image: “David in the Act of Picking up Goliath’s Severed Head.” Alexander Burns had Southport Lane acquire rights to the work, which at least one art expert attributes to Caravaggio, although various auction houses have said it’s an old copy by others, the Wall Street Journal reports. The Prado Museum in Madrid has a nearly identical version.