Call it "Mr. Hipster Goes To Delaware", or just a case of a regular guy who's tired of being pushed around by the rich and powerful. When Queens resident Nate Thoma gave a 24 minute statement in front of a judge at WaMu's bankruptcy hearing in December, it "changed the course of one of the largest bankruptcies in U.S. history." The Wall Street Journal, who apparently takes photos of subjects with Hipstamatic and will call any smoker with a scruffy beard a "hipster," details how the 33-year-old self-taught trader crawled his way back from losing all of his investment when the bank filed bankruptcy in late 2008, only to see hedge funds play in same strategy to quash smaller investors.
Thoma's shares in WaMu were "wiped out," and he set out to recoup his money. He began buying a type of security in WaMu that would place him closer to the front of the line in the event of a shareholder payout, but saw hedge funds like Appaloosa and Aurelius buy as many as six million units per day. "They were like whales passing in the night," he said. With the hedge funds poised to crush WaMu's smaller investors, Thoma spent hours pouring over arcane documents and submitted a 33-page report along with his oral statement, and the judge seemed to be pleased: "halfway through I realized she was paying attention. I realized she was going to let me go on and I went for broke."
Thoma argued that "it was unfair that hedge funds were able to eventually negotiate on behalf of" smaller shareholders like himself, and the judge agreed, ordering a probe of the hedge funds' records and even citing his report six times in her decision. Hedge fund managers were enraged but other shareholders from as far away as Europe filed objections in his defense. "Apparently, I'm big in Switzerland," he says. But with his wife banning any WaMu related conversation in their house, and with $500,000 in investments made, Thoma says he's quitting day trading: "The thrill is gone. It's such a big game…I'm picking up freelance Web work again." Spoken like a true
hipster risk manager.