Meet the Lamb of Wall Street, Broker of Sub Pop-Warner Deal, Buyer of DiCaprio's Cockatoo

Dana Giacchetto, photographed April 1 at The Lion in New York.

Photographed by Wesley Mann

Ovitz's power flowed through Giacchetto. "My performance for so many years was so good and quantitative -- not bullshit, not boiler room, really good -- that I started to get the Ovitzes of the world and the very, very serious heavy hitter asset managers to say, 'This guy actually f-ing knows how to trade. He has a gift. He may be a flake, he may be effeminate, but he knows what he's f-ing doing.' I'm some crazy mathematical rock-star wacko who sold Sub Pop and Matador and made a lot of money."

"Dana was a charming charlatan and a persuasive method actor who never deviated from character."

Giacchetto says his greatest deal was the 1994 Sub Pop sale to Warner. "I can now reveal that Universal was the top bidder, $25 million," says Giacchetto, "but it wasn't the right creative fit. Sony Music bid $5 million. David Geffen bid $8 million -- I told him his bid was way too f-ing low -0 and Microsoft bid a paltry $4 million, frankly insulting. Bill Gates, who at the time considered himself to be 'the future of entertainment,' couldn't have been a more dull character. It definitely would have made Microsoft a bit more hip, which in hindsight might have actually made Microsoft a player in entertainment. They're still not."

Microsoft refuses to comment on whether it ever had any interest in buying a small record label. But Sub Pop founder Bruce Pavitt and Rich Jensen, two of the few former Giacchetto associates willing to speak on the record, confirm Giacchetto's account and give him credit for the deal. "Dana was a charming charlatan and a persuasive method actor who never deviated from character," says Pavitt, who cleared $4 million on the sale. "He did pull off a brilliant deal with Time Warner, indeed allowing us to keep 51 percent of the company."

With his loft parties and extravagant trips with clients (to Cuba and Thailand with DiCaprio; on a $50,000-a-person Colorado whitewater raft trip for the Environmental Defense Fund), Giacchetto says, "I was trying to create a salon." But when he partnered with venture capitalists Jeffrey Sachs and Sam Holdsworth in the $100 million Cassandra-Chase Entertainment fund, he discovered a corporate culture that was intolerant of his punk-rock record-keeping style and high operating expenses. "It ruined everything," he says. "All of a sudden, it wasn't about all the genius cool people that I wanted to put together to meet each other -- artists, directors, writers, filmmakers, gay, straight, whatever."

The new venture was not to his liking for other reasons, too. Despite his flashy lifestyle, Giacchetto had been a relatively conservative investor -- a punk who worshipped Warren Buffett. He had the opportunity to get in early on his old roommate Craig Kanarick's Internet startup Razorfish, which would have made him a killing, but Giacchetto distrusted tech. "I never veered from that until big Chase came knocking at my door and said, 'Wow, you're pretty impressive.' It's Faustian, right? I was drinking and doing drugs, so I think my head was compromised. I was working 18-, 20-hour days all over the world. I never had a pyramid scheme or a Ponzi scheme. I just flew too close to the sun and spun out of control."

Giacchetto's fall from grace began when his investments performed poorly during the late 1990s, and instead of breaking bad news to his famous pals, he tried to cover up his losses, using client money to replenish other clients' accounts and pay company and personal expenses. When he was arrested April 12, 2000, he was carrying $4,000, mostly in fives and tens, and 80 first-class tickets.

Naturally, when his legal troubles began, his celebrity friendships ended. Officially, anyway. Giacchetto claims that many still have warm feelings toward him but are afraid to express them publicly. "Here's what's changed post-prison: Everyone is still lovey-kissy with me, but they're scared to death. When I go to Hollywood and see all my old clients, which I do, it's always off the record. Even the people that I loved the most, they would answer the phone like, 'I'm afraid to see you,' because Hollywood is so small. Leo, I mean, we only talked through lawyers through the years because we're afraid."

After prison, Giacchetto went to work briefly as an editorial hand for Jane Pratt's Jane magazine and for his attorney, Ronald Fischetti. "I made a deal with the SEC that I cannot be an asset manager, but I can do all kinds of other things," says Giacchetto. "I do deals, I've bought and sold companies legally." He shows off a $3.5 million contract for the sale of the Tribeca digital firm Syrup to LBI International, a marketing and tech agency. He has spent years raising money for his gourmet food business, Taste -- "I do like super-crazy exotic things in cans, everything from caviar to a whole lobster. We're doing [a deal with] Singapore Air this month." - and raves about his forthcoming product, IncrEdible, a food cleanser. "You can spray it on raw meat or fish or counter surfaces - it's the first, twice-U.S.-patented cleaner that you can actually eat. It's incredible. It's edible." He's hawking a screenplay of his dad Cosmo's novel When the Act Accuses Him -- "sexy, political drama infused with dark comedy, James Joyce meets Don DeLillo," he says. Cosmo made his own small fortune in real estate and once threw a party for Rocky Marciano. "My parents give me money right now. And I have access to vast wealth."

Recently, he invested $300,000 in a Las Vegas show called "Stripped," starring Steve Stanulis, the ex-cop stripper who worked as a bouncer at Giacchetto's parties. "[The now closed show] was a disaster," says Giacchetto. The credit card allegations, brought by federal prosecutors in New York, are somehow mixed up with the "Stripped" project. "There were all these people involved, flying around," says Giacchetto. "I'm not sure who paid for what. It's f-in' laughable, right? I don't even know what it is. I charged a bottle of wine?" (The complaint describes other allegedly fraudulent charges, including work by Giacchetto's dentist.)

"Dana is an asshole."

Giacchetto says he has found happiness as the father of two children, ages 6 and 8, though he adds that their mother, Allegra Brosco, a former assistant to independent producer Ted Hope, recently left him. "She said: 'I don't want to live this life, Dana. I can't live this life of being in the public.' " He's vague about where he currently lives, although he claims it is in Manhattan near David Bowie and Courtney Love. He alludes to a warm relationship with heiress and couture collector Daphne Guinness, whom Lady Gaga calls "a huge source of inspiration for me."Guinness gets rave reviews for singing the drug tune "White Rabbit" with Giacchetto's band Element 4. (Multiple sources say the two are just friends.)

Our three days are punctuated by moments of reflection and even candor. "I'm not in denial," says Giacchetto, who was required to pay restitution to his victims, although it is unclear how much he actually has paid. "I know a lot of f-in' people got hurt from what I did. I said I'm sorry to everyone personally, one-on-one. Everyone forgave me."

Actually, several investors told THR they don't forgive him. "And there was definitely no phone call of apology from Dana," notes the representative of one prominent former client. Hoffman, who lost half of the $220,000 she got from developing the musical "Rent" to Giacchetto's investments, puts it bluntly, "Dana is an asshole."

Giacchetto professes to be flummoxed by his punishments and banishments, given how those he deems the true wolves of Wall Street have prospered. "If you look at the demons of 2008," he says over beef tartare at the SoHo brasserie Lafayette, "in terms of who went to jail, there were very few people that were in big banks. It was absolutely malfeasance everywhere... which makes it remarkable that I'm being prosecuted for this thing now. It's crazy. Like, why? Why me? And Madoff, he has nothing to do with me because Madoff was a thug, a thief and a monster. I never planned to steal people's money. I got in over my head on deals that lost money. But I never stole."

At his 2001 sentencing hearing, Giacchetto tearfully told the judge, "I lived [in] a world of fantasy." At Lafayette, just a few blocks from the penthouse loft where he and DiCaprio partied and kept their matching set of cockatoos, he gets a faraway look and murmurs, "In a lot of ways I still live that way. Only because I believe in my dreams."