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To: Peter V who wrote (106892)	2/26/2008 5:46:50 PM
From: Peter V	Read Replies (2) \| Respond to of 306849

Jay Brown fires back at Ackman February 26, 2008, 5:34 pm You Won’t Have Bill Ackman to Kick Around Anymore Posted by Heidi Moore The six-year-long business clash between MBIA Chairman Jay Brown and Pershing Square investor William Ackman received a fresh boost today when Brown issued this letter to investors. In it, Brown took the perhaps unusual step of discussing Ackman as one of MBIA’s problems, saying: But as the leading monoline, we are also a convenient and attractive target for self-interested parties such as Mr. William Ackman. Many of you have asked me in the past few days whether there is something personal between us. In actual fact we have many similarities. We are both extremely passionate in our beliefs and are persistent in overcoming all obstacles in terms of reaching our objectives. The real difference is that I am leading a regulated institution that provides security, jobs and peace of mind to tens of thousands of institutions and millions of individual investors. Mr. Ackman’s objective is less complex; he will stop at nothing to increase his already enormous personal profits as he systematically tries to destroy our franchise and our industry. His campaign against us has increased our cost of capital, but his intent to force a collapse has no chance to succeed. Brown didn’t use the word “scoundrel” or request “pistols at dawn, sir,” but you get the idea. The brouhaha runs deep and long between the two. In 2003, securities regulators and then-New York Attorney General Eliot Spitzer began investigating Ackman for alleged market manipulation in his campaign against MBIA shares–a probe Ackman blamed on MBIA and its most ardent supporters (a camp into which, of course, Brown would fall). After questioning Ackman and diving into the documents of Gotham, his first hedge fund, investigators didn’t charge him with any wrongdoing. They then turned their sights to the MBIA accounting questions Ackman had been raising. Soon, the bond insurer was restating financials for several years, admitting it had used a reinsurance deal in the late 1990s to burnish some numbers related to its first big policy loss from a hospital system that went out of business. You couldn’t ask for a better showdown than this short of a reprise of Rocky Balboa v. Ivan Drago. Of course, it bears mentioning that “self interest” and “personal profits” are upside down here, since Ackman says he is giving the 20% of fees he earns on his bets against MBIA to charity and Brown, an investor in MBIA, profits if MBIA’s stock price goes up. Unfortunately for drama lovers, Brown may soon be shadow boxing, as a person familiar with Ackman’s thinking says the hedge-fund manager is going to lay low for a while and “let the market speak for itself.” Of course, that might be a good thing, because the mano a mano distracts from the real issue, which is MBIA’s structure and survival in what might be the toughest possible time for the bond insurance industry. With potential breakups and Congressional hearings, more people just want to know what really is going on with the bond insurers. –With Karen Richardson Permalink \| Trackback URL: blogs.wsj.com