Perry Friedman Full Tilt Poker
- Perry Friedman Full Tilt Poker Tournaments
- Perry Friedman Full Tilt Poker Chair
- Perry Friedman Full Tilt Poker Table
I’ve watched the first four episodes of the Howard Lederer interviews multiple times since they were released. I’ve read and re-read Andy Bloch’s interview with Diamond Flush. I’ve begun to write a post about both several times.
In 2002, I won the $1,500 Omaha Hi/Lo event at the World Series of Poker. I play poker semi-professionally, and have had numerous tournament successes besides my win. In 2003, I was hired as employee number 1 at a software company called Tiltware, which makes software for online poker. Our software was used by a Full Tilt Poker. Perry Friedman (born May 15, 1968) is an American professional poker player who won the 2002 World Series of Poker $1,500 Limit Omaha Hi-Low Split-8 or Better event, a founding member of the Tiltboys and is a Full Tilt Professional. Friedman has cashed 14 times at the World Series of Poker. 1 September 2005. Written by Wicked Chops Entity. Categories Uncategorized. The Tiltboys have cracked the code. Through common interests of poker, golfing, gambling, drinking, Roshambo, and constant angling to put each other on tilt, the Tiltboys (who include Phil Gordon, Perry Friedman, Rafe Furst, and Kim Scheinberg, among others) formed a unique bond that they somehow parlayed into a life consisting of nothing but: poker, golfing, gambling, drinking, Roshambo, and constant tilt angling. Lederer also said that the Full Tilt Poker community was not that fond of Ray Bitar, with Team Full Tilt Poker member John Juanda leading an anti-Bitar campaign within the community. He also revealed that Perry Friedman had resigned from the FTP board because he couldn’t approve of Bitar’s policies.
Because both are so lengthy and cover so much ground, it’s difficult to find a concise way to bring together my thoughts on everything that’s been said so far.
Rather than try to speak to the interviews in their entirety, I eventually settled on writing on them on a topic by topic basis. I think that’s the best way to communicate my thoughts in a way that doesn’t sound like I’m a rambling lunatic.
But before I start, I was actually quite surprised at the feedback I’ve received so far. I’ve had several Full Tilt competitors reach out to me, former employees of Full Tilt, and industry insiders, who all want to remain anonymous but at the same time felt it was important that someone point out the factual errors in both interviews.
I’ll try to do their concerns some justice. I probably won’t address each item unless it fits into something else I’m talking about. It’s just too tedious to go through each interview sentence by sentence and point out errors.
Selective Memories
Both Howard and Andy seem to display selective memories when it suits them in their interviews. At times, it can come off as almost comical. For instance, Andy Bloch’s – a man with two degrees from MIT and a law degree from Harvard University – best response to the question of whether or not he was under the impression that online poker was legal in the US is, “From what I had seen, yes…from what I heard after that they did…I mean, I never knew.”
Likewise, Lederer can remember some things like dates and other specifics in amazing detail but forgets if he had entire conversations with people on certain topics.
Granted, going back and replaying every single thing that’s happened for the last eight years is no easy feat but was Andy really surprised that he would get asked about the legality of online poker in the US? And Howard is under DOJ indictment which, I would assume, means copious amounts of time with legal advisors going over the minutia of the last several years and he can’t remember key events?
Ray Bitar
Both Andy and Howard put some distance between themselves and Ray Bitar. Andy is more blunt and repeatedly says that Ray was a liar and mistrusted by many of the owners. Howard is more neutral, not necessarily saying anything overly negative about Ray but certainly not painting him in any sort of positive light. Howard does discuss the fact that both Perry Friedman and John Juanda were vocal anti-Ray members but comes off as dismissive of their concerns (which mostly turned out to be accurate).
Although, I don’t think Howard planned for it to come off like this but when asked about whether or not he felt Ray was qualified to be CEO of Full Tilt Poker he says:
“Qualified, not in any traditional sense, he had passion for the company, he didn’t have an MBA degree certainly not, from education level bringing experience, didn’t bring education, but he was also an owner, very invested in the company, brought in to run the company by Chris, Chris’ friend, and in a lot of areas, he was doing a good job.”
Perry Friedman Full Tilt Poker Tournaments
Not exactly a ringing endorsement of someone Howard spent nearly every day with for 3 or 4 years and trusted to run the company. This is the key part of the interview most people have fun with. In fact, a few people I’ve spoken with have had quite a laugh at Howard’s response.
Segregated Funds
I had several people contact me about this one. I think it really rubbed some industry veterans and Full Tilt competitors the wrong way when Howard says “Nope. I just don’t know. It just wasn’t, company was strong, reports looked good, there was not this idea of segregated trust accounts, it just wasn’t anything of a real concern.”
People were quite vocal that segregating funds was the norm for most of the larger poker sites going back many years. The idea of comingling funds was not even entertained at many poker rooms because it simply was a bad business idea and borderline unethical.
In fact, back when Black Friday happened, I wrote something in which I didn’t make a clear delineation between how Full Tilt handled funds and how PokerStars handled funds and a senior level representative from PokerStars was quick to phone me and ask that I make the distinction more clear to my readers because they didn’t want any confusion on the subject.
Full Tilt’s idea of segregating funds was to have a main Full Tilt operational account and to have multiple processor and bank accounts that held player funds. Whenever those other accounts held more than player deposits, via rake, commissions, player loan paybacks, etc, they would sweep the money back to the Full Tilt operational account.
Not necessarily daily or weekly but as needed. So, there was never a player account and a corporate account. Funds mingled between the two quite freely and were reconciled by looking at the funds on deposit from players and total cash held and Full Tilt’s money was the difference between those two numbers.
Where a lot of people find this problematic is that it’s not even common in non-gaming businesses. This is something even small businesses don’t do when they handle customer funds on temporary deposit. And here you have this company with hundreds of millions on deposit and hundreds of millions in revenue and they’re doing their accounting like they’re running a lemonade stand.
I do have to say though that when I worked with Howard at Full Tilt, Howard made it very clear to people that everything we did had to protect the interests of players and to protect the integrity of the game. Within the company, he was always the player’s advocate.
So, I don’t believe this issue about segregation was a conscious decision to steal money or to use player money for corporate expenses on Howard’s part. I truly believe he thought this was a completely acceptable way to run a business as I’m sure he would have insisted on completely segregated accounts if he was even aware of the distinction.
And part of that reason why he didn’t know was because Ray, the guy who was supposed to be the business guy, seemed to have no problem with it and I doubt it was ever raised as a concern by the board of directors (of which Howard was a part and largely consisted of other people with little or no business experience).
Don’t get me wrong here; I’m not defending the fact that funds were not segregated. What I’m saying is that, Howard never worked in a corporate environment. He has no formal business training. Most of the board similarly lacks any real business experience. I’m sure both Howard and the rest of the board relied on Ray Bitar and the CFO of the company to advise them on standard accounting and cash management. Something they didn’t seem to do.
But just like the old saying goes, “ignorance of the law is no excuse.” The fact that the board members were unaware does not excuse them. If they were unqualified to perform the role of the board of directors they should have hired people who were qualified.
Reading Between the Lines
One of the reasons I had such a difficult time writing this post was because a lot of what is being said has to be parsed out of what both are actually saying.
For instance, Andy says multiple times that either he or other investors felt mislead, lied to, or misinformed by Ray Bitar. Howard details how Perry Friedman and John Juanda were very anti-Ray as were other shareholders in the company.
[contentadL]But, when Howard puts the burden on the shareholders to put together a 51% coalition and vote Ray out it betrays something both Andy and Howard seem to be saying but which is never explicitly stated; Ray was heavily protected. It was an empty challenge. Sort of like telling someone that if they don’t like the way the government works they should run for president or shut up.
Again, I’m not trying to be an apologist for Howard (or Andy) but I think if you read, really read, what Howard is saying, basically it sounds like it would have been political suicide to try to oust Ray. Obviously, Chris Ferguson, the largest single shareholder in the company, was backing Ray since Chris brought Ray into the company and they had been friends before Full Tilt was even formed.
So, Chris was never going to side with anybody critical of Ray and Ray, who was also a significant shareholder, was not going to vote against himself. Together, I’m guessing, they controlled a large enough block of votes that anybody who wanted to challenge them would have to get so many votes that it would be close to impossible to unseat Ray or the board.
Since that was unlikely to happen, I would expect that many people felt pressured to not make any waves. There was no upside to challenging Ray or Chris so I would imagine that people felt that it was better to work with them, even if they disagreed, than to fight them.
You also have to keep in mind that many of the shareholders had no skin in the game. Many of the shareholders threw in a token amount of cash or were given shares in exchange for promoting the company. Whether Ray was an angel or a devil wasn’t really their concern nor a fight they may have wanted to get involved in. As long as the checks were coming in and everybody was getting paid, why make waves?
Perry Friedman Full Tilt Poker Chair
Howard’s Demeanour
I’ve seen a few people on forums, Twitter, and other places talk about how Howard comes off in the video interviews. Some have called him disinterested. Some have said he seems uncomfortable (which they read as him being dishonest).
As someone who has been in plenty of meetings with Howard, that is how he is. I don’t think there’s anything to read into his speech patterns, body language, or anything else.
Howard, especially when discussing anything technical or fact-based, tends to be very methodical and careful with his words. He’s under DOJ indictment and is obviously trying to walk a fine line so as not to misspeak. I don’t find it surprising for him to be very cautious in what words exit his mouth.
I also found nothing too intriguing about his body language. I think people are trying to read a lot more into this than is there.
Full Tilt’s Board of Directors
As Howard puts it:
We saw our role in the company as an advisory board, we are not professional board members, we are not professionals or CEOs like the board of Apple, our job was to get on the phone with management, discuss the company, there was no expectation the board would be operating day-to-day. There was nowhere in the operating mandate, that the board should ever conduct outside independent forensic audit of financial figures that management provided.
It’s fine when the company is relatively small but this board structure, the charter and mandate of the board, is completely unacceptable in a company that was generating hundreds of millions of dollars a year in revenue and holding, on deposit, hundreds of millions of dollars of player’s funds which don’t belong to the company.
In fact, it’s not only unacceptable but irresponsible. I would go so far as to say that it’s reckless endangerment of the company.
As the company grew, part of the board’s job would be to expand the scope of its responsibilities and oversight in order to protect the shareholders who had elected them to the board. Most companies start off with a board that is mostly advisory but as the company grows the board takes on an expanded role in overseeing the company.
And that makes sense. When the company is worth $1 million and is losing cash, there’s not a lot to oversee. When you’re a billion dollar company with hundreds of millions of dollars in revenue and hundreds of employees, that’s a completely different proposition. It requires a different level of oversight. It requires different skills. Companies far smaller than Full Tilt was regularly bring in professional board members.
Or to put it in different terms, the company was constantly upgrading it’s technology infrastructure to accommodate increased traffic demands. The company was constantly upgrading the experience level of employees and executives it hired as the profile of the company and the amount of revenue on hand to run the company increased. The company moved from Los Angeles to Dublin in order to address various growth issues.
Everything in the company grew and adapted except for the board of directors. Not only was Ray completely out of his depth but so was the board of directors.
There are so many things throughout the Lederer interview that just reek of amateurism on both his part as well as the board’s. And the worst part is, Howard still doesn’t really understand how naive he comes off.
For instance, when he discusses Perry Friedman bringing his lawyer to the investor call, he portrays that as unproductive and perhaps even counterproductive but you have to remember that the DOJ had just indicted the company. Nobody was sure if they might be next on the DOJ’s hit list. They had no idea if they would be asked to do something that could put them in legal jeopardy.
If anything, Perry was the one who did understand how a real board of directors should act. Interestingly, Howard sees no problem in the fact that the board had a lawyer representing them on that same call (the one doing the role call) that he is critical of Perry for bringing his lawyer to.
I would love to find a single lawyer, anywhere in the world, that would advise their client not to have legal representation at a meeting of investors in a company that had just been indicted by the US DOJ. The fact that Howard would even find it surprising and be critical of someone for protecting their legal interests, says all that needs to be said about Howard’s maturity as a board member.
Especially since it was Perry Friedman who was the guy who warned the board about Ray back in 2006 and was forced out of the company as a thank you. Yet, in later videos Howard continues to characterize Perry’s lack of interest in helping the company as vindictive.
And then Howard expresses his disappointment because the group needed to “function as an entity” but somehow completely forgets that the company had been run for the last several years in a way that alienated several of the members. In Part I of the interview there’s a recount of an exchange between Ray Bitar and John Juanda several years back that pretty much sums up why the board was never going to function as an entity with or without lawyers being involved.
“John you can’t tell us how to run this company, you are an owner and nothing else, you don’t run the company, so just fuck off.”
And, in later videos, Howard does state that Juanda was tied as the second single largest shareholder in the company so if this is how Ray deals with someone like Juanda, well, is it any wonder that people aren’t exactly falling all over themselves to help when the shit hits the fan?
Howard sort of positions it that Perry set off a wave of shareholders bringing their lawyers to subsequent calls but Howard just spent an hour and a half of the interview detailing how the board dismissed the concerns of shareholders and backed the guy who just drove the company into the ground.
This is exactly what was wrong with the board to begin with. The amount of ego and hubris required to hold that point of view is on the verge of being delusional.
And in Andy’s interview, he states that in early June of 2011 that there was a movement to unseat the current board and replace Ray. I guess it never occurred to Howard that the members had lost faith in him and the rest of the board and viewed them as part of the problem.
What’s interesting is that this seems to be a common theme with Howard, Ray, and the board of directors. At every major juncture someone has issued a press release or some other communication expressing their hurt and playing the martyr card. Ray is hurt people think he’s been removed. The board is hurt that Ivey said bad things about them. Howard is working so hard to get the money back. Ray has worked tirelessly.
Blah, blah, blah
What were they expecting? A medal? A pat on the back?
Do they not realize that they so poorly managed the company that they basically took a business that was printing money and almost couldn’t fail and nose dived it into the ground? I mean, when you consider how badly you have to screw things up to ruin a company of Full Tilt’s size and with Full Tilt’s cash flow, it’s beyond mind boggling that they feel they should get credit for anything. This is the kind of screw up that ends up being a cautionary case study in an MBA course.
That’s the part that has so far been missing in all of this, humility. How about a sincere apology and accepting of their responsibility in all of this WITHOUT pissing and moaning about how hard they’ve been working or how hurt they are? They’re grown men and women. They need to quit acting like children.
What would might go a long way is if sometime before the remaining three video interviews with Howard are done, we hear something along the lines of:
While the board and I had no knowledge of Ray’s actions, we are the board of directors and that means that the moral and ethical responsibility falls on us. We didn’t do a good enough job protecting the company, protecting the investors, protecting our employees, or protecting our customers from the actions of a rogue executive who violated every principle we stand for.
It’s amazing that nearly a year and a half after Black Friday that nobody has been able to utter anything close to that. If they haven’t figure out that the biggest loss in all of this was player trust in the system, they never deserved to be running an online poker company in the first place.
Let’s see how the rest of this plays out.
UPDATE: Wendeen Eolis was kind enough to point out that Howard, Chris, and Rafe are not indicted as I may have said or implied. Apparently, this has been something that was originally reported in error and often gets repeated in other news sources which is why you can probably find references to an indictment on various news websites. Wendeen discusses the confusion in this article.
Go to my 'home page'Wouldn't you like to know? Well, OK, but where to start? If you'renot intested in my life history to date, and you just want to know whoand what I am now, jump down towards the end.
I was born May 15, 1968 in Brooklyn, New York. I was raised on Long Islandand attended Sachem High School, graduating in 1986.
I went to Stanford University where Imade a name for myself on campus for various and sundry reasons. Depending onwhom you ask, I was either famous or infamous on campus. I worked forthe Stanford Chaparral, thesecond oldest continuously published humor magazine in the country (next to the Harvard Lampoon). My work for thehumor magazine and my various associated pranks quickly earned me a reputationon campus. I started by faking the #1 draw card in the housing draw. Iwent to the Stanford Daily with the draw card and told them I wanted tolive in Synergy (traditionally, you could draw into there with ANY number).They bought the story hook, line, and stinker. The capper on it was that Iused the name Charles P. Pierce (Chappie is the nickname for the Chaparral). Then I ended my freshmen year with a controversialletter to the editor concerning some protests on campus.
Throughout my Stanford career I was involved in both humorous and seriouspursuits. I was a member of the Student Conduct Legislative Committeeduring the notorious 'fighting words' debate, taking the side of freespeech. I was interviewed by CNN and KNBR because of thatissue and also spoke at a local chapter of the ACLU. However, my greatestexposure came out of another serious issue turned farcical when I led arecall of the Council of Presidents in the spring of 1990. The story is toolong to describe here, but things got a little hectic when Bart Simpson's publicist learned that Bart had been elected to the GraduateSenate and that there were people protesting that his votes were thrownout (true, they were thrown out and there was a protest over votesbeing thrown out, but the main issue was how this affected the race forthe COP and whether or not this was legal under the ASSU Bylaws). Anyhow,the issue received national coverage and the story ran in USA Today aswell as numerous other papers throughout the country (the went out on the APwire). KRON TV came to campus to interview me in person and at least half adozen radio shows called in to talk to me. I even received a telegraph fromBart Simpson himself (well, his publicist sent it, but it said it was fromhim)!
In addition to my political and humorous pursuits, I also was a member ofthe Stanford Cycling Team for several years and continued to race bicyclesfor a few more years after graduating. I went coterm, earning my Bachelor ofScience in Mathematical and Computational Science in the Fall of 1990 andmy Masters in Computer Science in the Winter of 1991.
After graduation I moved to Chapel Hill, North Carolina and worked forIBM in the Research Triangle Park. After a couple of years I couldn'ttake it any more and I had to return to the Bay Area. Once you get a tasteof California, it's tough to stay away. I got a contract position at Oracle and my contract lastedthree months. I signed on to a permanent position with Oracle, beginning inMarch of 1994, but first I took a week off at the end of the contract toattend the Winter Olympicsin Hamar, Norway and watch my best friend and fellow Stanford alum,John Coyle, compete.
I was good luck, as the USA won a medal at every venue I attended. In fact,the US won five medals in the four venues I attended. I saw the women's relayteam win a bronze medal my first night in Hamar. The next day I saw Bonnie Blair win her final gold. The following day I saw CathyTurner win gold in short trackspeedskating in the 500m and fellow American Amy Peterson winbronze in the same event. Two days later, John and the rest of the USrelay team won a silver medal in the 5,000m relay. The trip was anabsolutely incredible experience. I was able to hang out (and party with)a lot of the Olympic skaters and I also had an opportunity to visit the Olympicvillage.
My stint at Stanford North (Oracle)ended after about two years and I went to work forHarman Interactive in San Jose, inFebruary of 1996. It didn't last long, as I decided to quit at the endof July to work on a startup venture with some friends.
After leaving Harman, I started a company called Pickem Sports with twoalong with two other people. The company ran contests, mostly aroundsports events. We were acquired by Internet Sports Network, but the combinedcompany collapsed when the Internet bubble burst.
For several years I worked for a company calledDigital Envoy. They providegeographic and connection speed information based on IP address.
In 2002,I wonthe $1,500 Omaha Hi/Lo event at the World Series of Poker. I play pokersemi-professionally, and have had numerous tournament successes besides mywin.
In 2003, I was hired as employee number 1 at a software companycalled Tiltware, which makes software for online poker. Our software was usedby a Full Tilt Poker.
Miscellanious stories on the web
- My trip toVegas - VERY long, but hopefully entertaining report on thelast 'pilgrimage' made by my poker buddies and I.
- My cruise - Labor Day week, 1995. More funthan should be legal, and some of it wasn't.
- Drag Poker - Another trip by my poker buddies and I. This time wewent to a San Jose card room and crashed a 'Ladies Only' pokertournament - in drag! Complete with pictures!
Well, that's me!
Perry