High Finance: Picking Up the Pieces

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Each morning, in his extradition-proof haven of Brazil, Edward Mortimer Gilbert, 38, trudges down to take the sun along Rio de Janeiro's Copacabana beach.

Usually he is alone, brooding over the collapse of his financial empire (TIME, June 22) in the aftermath of Wall Street's Blue Monday skid. But last week Eddy had a companion—handsome, French-born Olivier Coquelin, 32. Coquelin is the manager of a Manhattan cafè society watering spot called Le Club, where Eddy, bedazzled by a "board of governors" that includes Noel Coward, Rex Harrison and the Duke of Bedford, was an eager member. Said the loyal Olivier: "I have come to see zat Eddee does not go to zee dogs."

Post-Mortem in Zurich. As they struggled to straighten out their own finances, it was more difficult to find such concern for Eddy Gilbert's welfare among other of his former friends and associates. Before he resigned as president of E. L. Bruce Co., Inc., and fled to Brazil, Gilbert admitted to writing $1,953,000 in unauthorized company checks in a futile effort to meet margin calls on his stock in Bruce and Chicago's Celotex Corp. Fortnight ago. a federal grand jury charged fraud and ticked off 15 counts that, if proved, could put Gilbert in jail for 74 years. The same day the Internal Revenue Service filed tax liens of $3,464,472 against Eddy and estranged wife Rhoda.

The reverberations of the Gilbert crash echoed in Europe, where Eddy had borrowed much of the money to underwrite his scheme for seizing control of Celotex. In Zurich, darkly smooth Abdulla Zilkha, 49, an Iraqi-born financier who makes a specialty of lending money to would-be securities buyers on low margins but high interest rates, ruefully admitted that his firm had some $2,000,000 riding on Gilbert. "We won't know about our losses," said Zilkha. "until a post-mortem is made."

Wounds in the Jet Set. Also nursing wounds were some jet-set luminaries who had eagerly grabbed a ride on what looked like the Gilbert gravy train. In New York, Wall Street's McDonnell & Co.. whose president is Henry Ford's brother-in-law, brought suit against Man about Manhattan Jacques Sarlie, 47, a Dutch-born market operator and art collector. Sarlie. complained McDonnell, refused to pay for $754,770 worth of Bruce and Celotex stock bought for his account. (Sarlie's rebuttal: McDonnell had bought the stock without his authorization, on orders from Eddy Gilbert.) Still another victim of Gilbert's downfall was his personal broker. Francis Farr, a socialite customers' man for McDonnell & Co., who invested heavily in Bruce stock. Until Blue Monday, Farr did so well that three months ago he was able to buy the late Dag Hammarskjold's old maisonette on Park Avenue.