- Temel substituted attitude for experience, irreverence for authority.
If Gregory Temel were writing this story, he'd probably use a lot of words like "weasels," "suckers," and "screw-ups." He'd surely poke fun at somebody. And he'd probably throw out a rhetorical question or two, something like: Which side of this gawdawful mess would you want to be on?
As the founder of BeyondTheBull.com -- an often irreverent, sometimes juvenile financial website -- Temel once described himself as the "Howard Stern of online investing." In his daily dispatches to subscribers, he referred to Federal Reserve Chairman Alan Greenspan as "Greenslime." He picked apart the "piss-poor job" of the financial press. He warned those who didn't follow his stock picks that they'd be "road kill," "crushed like a bug on a windshield."
As he once summed up his philosophy for Crain's Cleveland Business, "My feeling is that people take this stuff way, way too seriously."
Temel, apparently, was one of them. On March 6, 2002, he was found dead at his Beachwood office, a single gunshot wound in his chest. On a table in the conference room where the body was discovered, police found a revolver and gun-cleaning supplies. The coroner initially ruled the death an accident; only later was the verdict changed to suicide.
By then it was too late to abate the intrigue. Temel's company, it turns out, was up to its armpits in debt. Since his death, more than a dozen suits have been filed against BeyondTheBull and its parent company, Executive Day Trader, as investors, clients, and banks attempt to recoup their money. Allegations of fraud, forgery, and false representation now pepper the legal proceedings. Even the FBI has taken an interest.
Such things aren't uncommon when a business goes belly-up, but they usually yield more tangible results. But today, a year after Temel's death, the only thing anybody seems to know about BeyondTheBull was that nobody besides Temel knew very much.
And though its failure wasn't the biggest or most prominent dot-com flameout, it may be the messiest. As one former investor sums it up: "It's a can of worms that won't fit into a 55-gallon drum."
Those who knew Temel describe him as driven and personable, a "dynamic individual" devoted to work and family. He would usually wake before 5 a.m., so that subscribers could receive his newsletter by the time they got to work. Away from the office, he doted on his three children.
"His kids and his work -- that's basically his life," says Phil Rodopoulos, who started a web development business with Temel in the mid-1990s.
Temel was a self-taught stock picker. He never trained as a broker, never worked on Wall Street. After graduating from law school in the 1980s, he went to work for his father, W. David Temel, who had founded Hospitality Management Systems in 1985. The company managed economy hotels, mostly in Ohio, Kentucky, and Texas.
By the early 1990s, HMS was doing a nice bit of business, but the Temels had larger ambitions. In 1991, they formed a separate company to obtain the management contracts and franchise rights to more than 200 Knights Inn hotels, whose former management had fallen into bankruptcy. Almost overnight, the move put thousands of additional employees and millions in gross revenue on the Temels' books, transforming the family into national players in the hotel industry.
That wasn't necessarily a good thing. In 1994, the Federal Deposit Insurance Corporation filed a suit against the Temels' holding company -- Knights Lodging Inc. -- in an attempt to collect $24 million loaned to several of its hotels by a failed Missouri bank.
The Temels fought back, arguing that they weren't at fault because the bank hadn't held up its end of property and loan agreements. The move initiated a long battle with the FDIC -- a fight that foreshadowed some of the weirdness that would hang over BeyondTheBull.
In the fall of 1994, a federal judge ordered that Knights Lodging be taken over by a court-appointed receiver. When the receiver showed up at the company's Cleveland headquarters with federal marshals, he found more than the usual array of desks and documents; he found several weapons, including semiautomatic guns and hollow-point bullets.
Things got weirder. A month later, Ernst & Young, the accounting firm designated to audit Knights Lodging, removed itself from the case after an accountant allegedly overheard David Temel say that an Ernst & Young partner's testimony would "cost him his life." Temel later testified that he had actually said he was going to sue the accounting firm "for their lies."
The case dragged on for three years. A judge eventually ruled that Knights Lodging wasn't on the hook for the loans. But the damage was done. The tangle with the FDIC crippled business, and Knights was eventually forced to file for bankruptcy. Temel would later tell Crain's he learned a bitter lesson from the experience: "If the government wants a piece of you, they can own you."
Fighting the feds did have its advantages. Temel had time to develop other interests. He started several small businesses: a web development firm, a real-estate holding company. He dove into the stock market, becoming particularly interested in the minutiae of tech stocks. He began writing down his thoughts and e-mailing them to friends and colleagues. "I think it's an understatement to say that he was really into it," says a friend.
So in 1999, Temel launched BeyondTheBull, a financial website for amateur traders. It was boom time in the market, and thousands of stock-picking websites were crowding the Internet. But Temel had a shtick: He would be the Jerry Springer of the CNBC set, substituting attitude for experience, irreverence for authority. He called Alan Greenspan a "bald weasel" when he pooh-poohed the market. He railed against the "good old boys" -- which seemed to mean anyone but him.
The style had its fans. "I've been in this business since 1962, and I'm going to tell you something: This guy's a pro. A pro's pro," financial columnist Malcolm Berko once said of Temel.
Indeed, by the summer of 2000, Temel's brash approach was paying off. He spoke at trading seminars. He did a daily market wrap-up for Bridge News's broadband network. He was the subject of a flattering profile in Crain's.
In that article, Temel said he had 4,200 subscribers, who each paid $20 a month for his services -- numbers that would have meant a healthy cash flow for what was a very small business.
Yet Temel had more ambitious plans. He convinced at least three investors to sink hundreds of thousands of dollars into BeyondTheBull. The idea was to eventually take the company public. "His strength was writing interesting commentary on tech stocks, and we were hopeful that we would put together a situation where it would have an appeal for an IPO," says Donald Mosher, one of the investors. "Of course, many things happened that derailed that."
The derailment started even before Mosher got on board. After peaking three years ago, the NASDAQ -- home to Temel's tech stocks -- began its slide into the toilet. Within a year, high-flying stocks were worth a fraction of their former value. Bellwethers like Cisco Systems, for example, nosed north of $80 in March 2000; it recently closed at $13.20.
Even with the market's slide -- and the rapidly diminishing likelihood that BeyondTheBull would ever go public -- Temel's appetite for cash grew furiously. In April 2001, he secured a $300,000 loan from National City. Two months later, the bank established a $250,000 line of credit for the website's "daily operation."
That August, KeyBank got in on the act, lending Temel $150,000. In September, Key kicked in another $100,000. In October, Temel went back to National City, which was good for another $225,000. Then, the day after Christmas, KeyBank approved Temel for a whopper: $2.15 million.
All told, Temel borrowed more than $3 million in the 12 months prior to his death.
Among the myriad mysteries that surfaced following Temel's suicide, the question of how he managed to get those loans looms large.
At least a couple of people think Temel lied. In an affidavit filed last year, investor Dick Blum reported that on several KeyBank loan documents, signatures by several Executive Day Trader board members were forged. National City also subsequently filed documents stating that Temel had "perpetrated a fraud" by fudging names on loan documents.
Even if that were the case, however, a far bigger question still hovers over the matter: Where the hell did all that money go?
Unlike the loan fight, it's a question that probably won't be answered anytime soon -- if ever. Anyone who might have the slightest clue isn't talking. Through her attorney, Temel's wife declined Scene's interview requests. The attorney who incorporated Executive Day Trader did not respond to phone calls. The FBI, which became involved after allegations of forgery surfaced, isn't talking either.
People who might venture a guess are not particularly forthcoming. Friends, business acquaintances, even former investors remain tight-lipped. "It's been a while since everything happened, and I'm just worn out," says one friend, summing up the feelings of many who knew Temel.
Those still fighting to get a piece of what's left also haven't had much luck getting answers. Though investors such as Mosher and Blum have been granted default judgments against the company, they have yet to see a dime.
Many of those hoping to recover money have consolidated their cases into a suit originally brought by KeyBank. Set to go to trial next month, the suit seeks to recover money from Temel's life insurance: a $1.7 million policy he took out six months prior to his death, which names Executive Day Trader as the beneficiary.
But even that prospect remains dim. For one thing, the policy includes a suicide-exemption clause, which nullifies any payoff. And even if the insurer pays out, there's sure to be another fight over who gets the money. Mosher, Blum, and David Akers -- another investor -- have argued that KeyBank was negligent in some of its loans. The bank, they argue, shouldn't be compensated for its own stupidity.
In response, Key has called those claims "self-serving and purposefully misleading."
Some people, it seems, still take this stuff very, very seriously.