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July 17, 2015

Hunt Scanlon: $7 million in embezzled receipts and relationship with DHR International

Update July 17, 2015: Hunt Scanlon continue to serve as a mouthpiece for DHR, have been deleting incriminating posts and have turned off the ability for readers to add new comments to their web site. We also track the fact that they have been writing more stories about DHR, Cadwell and CTP than they have the big five put together. A recent update includes the judgement against Hunt-Scanlon Corp and their jaw-dropping role in the demise of the Whitney Group through the receipt of $7 million in illicit transfers

Christopher Hunt and Scott Scanlon
One of the more interesting protagonists in the DHR/CTPartners/Caldwell Partners saga is a company called Hunt Scanlon Media (formerly, HSZ Media). This is a business founded by former bankrupts, Christopher W. Hunt and Scott Scanlon.

Readers of this web site shared with us Chris Hunt and Scott Scanlon's previous background, running a similarly named Hunt-Scanlon Corp. You couldn't make this stuff up. According to a 2008 Bloomberg article:
"Whitney Group LLC, a 20-year-old recruiting firm that helped Wall Street banks hire executives, sued its former chief financial officer, claiming his financial "misappropriations'' caused the company to collapse." 
"Ex-Finance Chief Jeffrey Sussman, 51, committed fraud when he advanced "millions of dollars'' without authorization over four years to Hunt-Scanlon Corp., a company that tracks the executive-search market, according to a complaint filed Sept. 25 in New York State Supreme Court in Manhattan. Whitney also sued Hunt-Scanlon, alleging the Riverside, Connecticut-based company owes it $7 million from the money transfers.
Whitney is insolvent, unable to meet payroll obligations and plans to "wind up'' its affairs under New York's Debtor and Creditor law, according to the complaint. Whitney said it ousted Sussman on Aug. 29 based on "the substantial and unauthorized cash advances.''
...  
"Hunt-Scanlon's Chris Hunt and Scott Scanlon were also named as defendants in the Whitney suit. Hunt declined to comment and Scanlon didn't return a call." 
... 
"Whitney alleged in the complaint that Sussman's advances were made in "small and irregular'' amounts to Hunt-Scanlon and individuals that had personal, professional and family relationships with the company."  
""Sussman failed to disclose and actively concealed his misappropriations from Whitney Group until, as the company became starved for cash in August, he had no choice but to confess the indebtedness of the Hunt-Scanlon Defendants to Whitney Group was in excess of $7 million,'' according to the complaint."  
"Whitney Group, which has offices in New York, London, Boston and Hong Kong, generated revenue of $30 million last year. As of August, it had a no cash balance and accounts receivable of less than $100,000 in New York, according to Sussman's complaint."
What were these $7 million in payments for? Increasing Whitney's standing in Hunt-Scanlon's ranking table? PR advice?

In his 2010 judgment in Whitney Group vs. Hunt-Scanlon Corporation, Christopher W. Hunt, Scott Scanlon, Judge Charles E. Ramos the Supreme Court of the State of New York found the following facts:
"In August 2008, Whitney Group, an executive recruiting firm, discovered that beginning in 2004, its chief executive officer, defendant Jeffrey Sussman, misappropriated a total of $7 million over several years in corporate advances (the Funds) to defendants Hunt-Scanlon Corporation (Hunt-Scanlon), Scott Scanlon and Christopher W. Hunt (together, the HS Defendants), Sussman concealed the misappropriation, that was made without Whitney Group's authorization or knowledge and for no apparent legitimate business purpose, until August 2008. At the time of the filing of this action, Whitney Group is insolvent." 
...  
"Whitney Group terminated Sussman for cause and unsuccessfully attempted to recoup the funds from Hunt-Scanlon." 
"In September 2008, Whitney Group commenced this action and asserted thirteen claims. The claims are for breach of fiduciary duty, and disgorgement of compensation against Sussman; aiding and abetting breach of fiduciary duty, piercing the corporate veil, and unjust enrichment against the HS Defendants; conversion against Sussman and the HS Defendants; fraud and breach of contract against Sussman, Hunt-Scanlon and Hunt; money had and received against Scanlon..."
As a result of this, both Chris Hunt and Scott Scanlon were declared bankrupt, leading to some forced asset sales.

But Hunt and Scanlon re-emerged with two new businesses: Hunt Scanlon Media and AERIS | Media Group. The industry was aghast at the time, but everybody seems to have forgotten this recent history. (And, if you read Hunt's LinkedIn profile, the old Hunt Scanlon that received $7 million in payola and the new Hunt Scanlon are the SAME business as he has been running it from "October 1988 – Present (26 years 10 months)".

In a DHR-like way (i.e. filled with hyperbole), Hunt Scanlon claim they:
  • are "the most widely referenced, single source for information in the human capital sector"
  • "have assembled a team of trusted, experienced reporters and editors to track who is making news and what's driving the market around the clock"
  • "have one of the best management teams in the field"
  • have "been defining and informing the senior talent management sector for over 25 years" (despite having been founded less than 5 years ago)
Hunt Scanlon broke the news about the management issues at CTPartners, DHR's bid for CTPartners, the mass departures at CTPartners and the spike in Caldwell's shares. Hunt Scanlon are clearly well connected to DHR to the extent that DHR are tipping Hunt Scanlon off when DHR bought shares in CTPartners or Caldwell Partners. Hunt Scanlon have written about these sagas and managed to do so with enough forewarning to get third party quotes.

Firstly, is Hunt Scanlon's Scott Scanlon related the DHR's Sean Scanlon, the "managing director of the firm's Los Angeles office and is the global leader of DHR International’s Media & Entertainment Practice Group"?

Scott Scanlon, Hunt Scanlon Media
Sean Scanlon, DHR International

If he is or if Hunt Scanlon have been receiving payola from DHR and this remains undeclared, this may represent market manipulation.

We also wonder whether Chris Hunt and Scott Scanlon's separate PR firm, AERIS | Media Group, are on DHR's payroll.

Scott Scanlon has been quoted as saying: "Basically, what we [AERIS Media Group] do is build, extend and manage corporate brands".

Chris Hunt has been quoted as saying: "We want to go in and help repackage and resell that image and remind people that this particular client is very professional."

The AERIS | Media Group web site and LinkedIn page reinforce this: "AERIS | Media Group … provides integrated marketing, public relations and communications support to companies and business professionals seeking corporate brand turnarounds and personal image campaigns. Building, managing and extending your brand - that's what we do - and we support these initiatives through well-tested brand management services focused on global, national, regional and local major media placements."

One of AERIS' services is media management & placement:
"The partners of AERIS | Media Group bring close to 25 years of proven and successful media placements for our clients. These include The Wall Street Journal, The New York Times, Forbes, Fortune and BusinessWeek to name just a few as well as dozens of local and regional online and print media that have carried our clients' messages to tens of millions of existing and potential clients and consumers. We work closely with our clients to design well-thought-out, unique and original media and communications campaigns that meet their needs and objectives."
"As a subset of our media management services, AERIS | Media Group develops, writes and disseminates news and information through press releases to various media and Internet outlets for maximum visibility. Many of our clients release and publish news and announcements on a regular basis - AERIS | Media Group works closely with them to leverage that information. In this capacity, we identify the best media partners to position information, with a strong emphasis on the Internet and social networking outlets that syndicate news and information for high visibility impact. As an adjunct to this service we also serve the speechwriting needs of our clients. Whether communicating messages internally or outside to a wider audience, our custom speechwriting is informative, persuasive and is a significant tool in our overall communications strategy package."
Doesn't quite sound like the job of independent reporters covering an industry, does it? But it does sound like the sort of service that DHR International requires. It is what is called "native advertising" or "content marketing" but these sorts of activities must be declared and it is illegal to do these where they are to do with market-sensitive information about listed stocks.

Are DHR clients of AERIS | Media Group? We emailed Scott Scanlon some time ago and asked him whether he is related to Sean Scanlon and whether he or his associates are engaged by DHR. Many days have passed and we have not received a response, suggesting Hunt Scanlon have something to hide.

We know our web site is focussed on DHR International and its improprieties - after all it is in our name. But Hunt Scanlon claim to be an industry newsletter. Scott Scanlon however has posted 12 out of 49 stories on his LinkedIn Pulse on DHR/CTP/Caldwell, and all stories are favorable to DHR. Compare this to 2 each on Korn Ferry, Spencer Stuart, Russell Reynolds and Egon Zehnder, and none on Heidricks. Is this because he is being paid by DHR to do so?

Interestingly, Hunt Scanlon have been deleting stories from their web site (and another one) related to DHR and CTPartners. Given that there are supposed SEC investigations and class action into the CTP scandal, destroying these records may have them in legal hot water, again. Hunt Scanlon have also stopped people adding new comments to stories on their web site, although their site still has a request for comments on every page.

How can you both run a PR firm and an industry newsletter? Is this not a conflict of interest? Each of Scott Scanlon and Chris Hunt neglect to disclose their roles in AERIS | Media Group on their LinkedIn profiles. Both businesses share the same contact details. This is Hoffmanitis by omission.

Often Hunt Scanlon write an article in which they quote one of their owners (usually Scott Scanlon) as an "expert"! They also quote their own ranking table of search firms, which (as previously disclosed on this web site) is grossly inaccurate when it comes to DHR International. In other words: the writer of an article quotes himself as an expert and refers to his own ranking table. When combined with owning a PR company, this is vertical integration!

Scanlon's article claims "It was just three days ago that Chicago-based DHR, the sixth largest U.S. search firm, struck a deal to acquire 17 offices and 250 employees of embattled rival CTPartners." This paragraph is filled with inaccuracies. Firstly, DHR is not the sixth largest search firm in the US. Secondly, DHR are not acquiring any offices or employees: DHR are hoping and claiming they will pick up this number of offices and employees but it not yet known whether this will happen. It is woeful journalism by Scanlon to assert as fact a company's expectation.

Pity the poor search firms that aren't aware of the Hunt Scanlon history and advertise in Hunt Scanlon publications, emails and web sites.

32 comments:

  1. I have reached out to him before about this, and he stated they are not related.

    I agree with you though, the fact Hunt Scanlon Media was the only one with information did seem like there may be a relationship with DHR. Also, Hunt Scanlon Media reported information about the pending CTP acquisition (at the time) that may have been material information (could have impacted the way individuals had traded); a lot of companies in acquisition talks sign non-disclosure/confidentiality agreements, so I would not be surprised if their reporting would represent a breach.

    ReplyDelete
  2. http://www.thedeal.com/content/restructuring/ctpartners-asset-sale-wont-save-it-from-bankruptcy.php

    Another article that includes Scott Scanlon. Odd how he seems to know everything going on behind the scenes.

    ReplyDelete
  3. Also interesting is that DHR knowingly made an offer that CTPartners would refuse, because the offer would not satisfy all of its lenders. Is that legal to enter into talks and offer an unrealistic offer?

    http://www.huntscanlon.com/Pages/Body/HumanCapital.aspx?topicid=13534

    ReplyDelete
  4. Explosive stuff, particularly as you have pointed to the evidence.

    Let me make sure I understand this.

    Hunt and Scanlon have previously been on the take from a search company to the tune of at least $7 million and this led to the demise of that company, and their company. They went Chapter 11 and then formed some new businesses that both publish on the industry and do PR. They print a bogus ranking table, possibly where "clients" like DHR can increase their ranking by providing false information. And they publish articles that impact the prices of listed businesses?

    And that's legal?

    ReplyDelete
  5. And they run a recruiting business on the side by Chris Hunt

    ReplyDelete
    Replies
    1. Sorry I don't recall.. Only that Chris was able to present my details to a number of headhunting firms

      Delete
  6. I'm confused as to why newspapers are not using what's published here ! I could write a best seller factual documentary.... Title 'how to destroy a company and profit 101'

    ReplyDelete
  7. Sleezy. Sleezy. SLEEZY!

    ReplyDelete
  8. Not enough people are talking about the trading halt. If they trading halt keeps going until after the company winds down, then shorts will not have to cover. Pretty evident at this point that management at CTP is keeping this halted, as there has been no news from the NYSE (their procedure for delisting is to issue a press release and send notice to the company). News has supposedly been pending since last Tuesday (June 23, 2015). There is no way MATERIAL news takes this long to issue.

    ReplyDelete
  9. Here is another question for you. Where did the person who filed the EEOC complaint against CTP work? No reward for guessing the answer.

    ReplyDelete
  10. Interesting to note that Hunt Scanlon's daily news wire has not had an article for a week now (keyword daily).

    ReplyDelete
  11. Hunt Scanlon just took down all the articles related to CTP/DHR/Caldwell on their Daily Newswire page. I wonder why?

    ReplyDelete
    Replies
    1. I noticed that as well. First they didn't post an article for over a week, now they are pulling down articles. Something is definitely going on behind the scenes.

      Delete
    2. Why? Because they will be joined to the class action covering the market manipulation of CTPartners and Caldwell Partners. They claim to be independent commentators but they are guns for hire and their fingerprints are now all over the downfall of at least two search firms.

      What creeps!

      Hunt and Scanlon: you are reading this - why don't you come clean on your involvement in Whitney Group and DHR/CTP/Caldwell.

      Delete
    3. And they've stopped readers posting comments. This wonderful blog has got them running scared!

      Keep up the great work. And why don't you extend it to cover the whole industry? You are doing a better job than Hunt Scanlon or the Filefinder owned newsletter.

      Delete
  12. Thank you so much for your blog. Please keep up the great work. It's provided some solace after everything DHR has done to me personally and financially.

    ReplyDelete
  13. Thank you for this blog. I am among those who have turned down DHR. My heart goes out to the support staff at CTP who listened to the messaging coming from management that "if we stick together, we will get through this." What a load of crap!

    ReplyDelete
  14. What a joke!!

    http://www.dhrinternational.com/about/news-media/dhr-international-responds-letter-board-directors-caldwell-partners-international

    ReplyDelete
    Replies
    1. Sad how this is legal. A larger company can buy its way into a company. Then, it can make a supposed "offer," which if rejected, can allow the buying company to voice its opinion as a major shareholder. DHR acts like a child throwing a fit because it didn't get what it wanted..

      Delete
  15. I had to reread this post and followed the links to Bloomberg, etc.

    Let me just say: wow. How can Hunt Scanlon get away with this? As I then reread all their stories on DHR, it becomes apparent that they are probably being paid by DHR and have been involved from day-zero in the CTP and Caldwell sagas.

    This is not just unethical, it is criminal!

    Keep up the great work!

    ReplyDelete
  16. Every day, Hunt Scanlon are posting a story on DHR as their #1 story. I wonder why?

    And they no longer allow people to post comments, even though there's a line at the bottom of every story encouraging to post comments.

    It is clear Hunt Scanlon are on DHR's payroll.

    ReplyDelete
  17. I was approached by Chris Hunt saying he could place me at another firm. Slight conflict of interest ?

    ReplyDelete
  18. Interesting Links on Hunt & Scanlon bankruptcy & their house sale

    https://christopherfountain.wordpress.com/2011/04/29/i-dont-know-the-story-on-this-one/

    http://bankrupt.com/misc/ctb09-50083.pdf
    http://bankrupt.com/misc/ctb09-50084.pdf

    ReplyDelete
  19. Hunt Scanlon - Paid advertisements disguised as "facts" and "news".

    ReplyDelete
  20. Hunt Scanlon have re-enabled comments on their website, but all comments are now moderated. Guess they didn't like the fact that people were drawing attention to their scandalous past and shady present.

    ReplyDelete
  21. More on Hunt Scanlon as the trusty sword of impartial truth here on WSJ http://www.wsj.com/articles/SB1034030070348205440 Read past the stuff on Chris van Someren, although he sounds like an ideal DHR Partner. It's when it gets to Gene Shen that it gets interesting. We now know Hunt Scanlon went bust for the $7m fraudulent payment from Whitney executive to them. And after Shen had left Whitney to join Options Group this happens "Hunt-Scanlon Advisors raised doubts about his professional and educational credentials." It is great to know Hunt Scanlon carry the trusty Sword of Truth, and can be relied on to seek out those who exaggerate their "professional credentials".

    ReplyDelete
  22. Anymore news on these guys?

    ReplyDelete
    Replies
    1. Thanks to this blog, they've stopped any comments coming through on their website. I have posted innocuous, relevant comments and they don't get through the moderation process. They've battened down the hatches as you would do when you have the dirty background they have and are doing the dirty deeds they continue to do.

      Why doesn't the mainstream media do a story on Hunt Scanlon?

      Delete
    2. I've been waiting for the day where I'd see a professional story on them. Perhaps a local news story could get the ball rolling. These guys continue to lie, cheat and steal from their business contacts and friends!

      Delete
  23. I was one of the unfortunates who worked at Whitney Group, though not as unlucky as some in how much the bankruptcy cost me. For anybody who wants to write a full story on these crooks, the court papers and discovery documents (Whitney Group LLC v Hunt-Scanlon Corp., et al LBBS File No. 25197-173) show in hair-raising detail how Messrs Hunt & Scanlon, together with family members and an assortment of businesses under their control milked $7.1m from Whitney by the time it was discovered in 2008. That these two remain involved in and welcomed in some corners of the search industry should be a matter of shame to all of us who call ourselves search professionals.

    ReplyDelete
    Replies
    1. Thanks for your comment. Are you able to email us any of the court papers to us at unofficial.dhr(at)gmail.com?

      Delete