How Wall Street could profit from cheating (on spouses)

The adult hook-up site Ashley Madison could mean big bucks for investors

Topics: AlterNet, AShley Madison, Internet Culture, Internet, online dating, , , , ,

How Wall Street could profit from cheating (on spouses) (Credit: Firma V via Shutterstock)
This article originally appeared on AlterNet.

AlterNet The wizards of Wall Street never leave your side. They’re on hand to make money off you at every stage of life — in sickness and in health, for richer for poorer. They even turn a profit when you die.

So it should probably come as no surprise that they’re now poised to reap rewards from your adulterous affair. One thing you can say about Wall Street: They know from cheating. And cheating is big business in America.

Sin is lucrative, and financiers feel it is their solemn duty to get in on any activity that legally (or quasi-legally) makes a profit. That includes gambling, smoking, drinking (even raves), and now, bless their clever souls, playing around on your spouse.

Wall Street knows that the path to fulfillment in America is paved with self-indulgence, and they would very much like to assist us in cultivating our appetites for sexual and material gratification. The Journal of Couple and Relationship Therapy finds that nearly 50 percent of married women and 60 percent of men will stray outside the marriage for sex at some point. Before the Internet, Wall Street wasn’t able to cash in on all that hooking up. But times have changed.

Enter Ashley Madison

In a long-ago epoch, people searching for extramarital fun would have to cruise conferences, warm bar stools, or try their luck with classified newspaper ads. Today, it’s easy to let your fingers do the walking. Websites like AdultFriendFinder.com and Fling.com offer semi-anonymous hookups. Craigslist’s Casual Encounters will give you just that, whether your idea of casual involves phone sex or shemales.

What if you just want to have a good old-fashioned affair, complete with dinner dates and actual conversation? The stuff you used to do with your spouse? That’s where Ashley Madison comes in with its cheerful slogan: “Life is short. Have an affair.”

Born in Toronto in 2001 and christened with two popular and innocent-sounding baby names, Ashley Madison promotes the somewhat paradoxical idea that you can have a great open marriage—even if your spouse doesn’t know it’s open.



Diving into Ashley Madison, which has its own blog and Twitter feed, is like entering a weirdly compelling parallel universe where the rules you’ve always been taught do not apply. The tone is breezy, upbeat and nakedly commercial (“First Date With Your Affair Partner? 6 Online Shopping Experiences to Help You Look Good for Less and Seal the Deal”).

Content is mildly cheesy, often crass (Fingerbanging 101), but at times even touchingly earnest (hey, this isn’t just a fuck-buddy, it’s a human being!). In this realm, the American Way is clearly life, liberty and the pursuit of infidelity.

Naturally, people have been signing up in droves. In a recent Newsweekprofile “Wall Street Loves a Cheater,” Lynnley Browning reports that membership has “nearly quadrupled over the last five years, to 12.7 million in the United States and another 8.3 million overseas in 30 countries.”

Who are these people? Reports reveal that the Ashley Madison membership community is 70 percent men and 30 percent women. America’s top cheating city, according to company data, is Washington, D.C., where over 6 percent of residents have paid memberships. (Founder Noel Biderman reports getting perplexed calls from the Justice Department and the IRS about inexplicable credit card charges.) The company also found that the top alma mater for cheaters is the University of Minnesota (we did hear of interesting goings-on in the Minneapolis airport bathroom). It looks like the Ivy Leaguers are finding their action elsewhere, perhaps through high-end escort services. Or there’s always the pool boy.

The site plays masterfully on the psychological needs of the cheater, whether it’s boosting self-esteem (“Be The Cool Confident Male You’ve Always Wanted To Be”), depression (“It’s Fall. Keep Your Mood Up By Having An Affair”), or excitement (“How To Buy Your Affair Partner A Sex Toy”). I couldn’t help but wonder how many cheated-on spouses might enjoy the sort of fun the cheaters were signing up to have with their new friends. But obviously people go to Ashley Madison for something they can’t seem to find—or to offer—in their marriages.

The business of cheating

Users of Ashley Madison buy credits to cover email and chat conversations with potential affair partners on an internal system. Only men pay for credits. Women can join and chat for free, and according to reports, many of them are just looking for cybersex, while some are clearly searching for sugar daddies. There are special programs available to make cheating easier for business travelers. Cheat on the go!

At first, it looked like Ashley Madison might be too hot even for hedge funds to handle. But quaint ideas like those expressed by Vanguard’s venerable chieftain John Bogle about the positive role business should play in society are getting chucked aside in the search for easy money. And Ashley Madison is buckets of easy money. Newsweek reports that it hauled in $30 million in profits on $90 million in revenues last year, and expects $10 million more in profits this year.

Canadian hedge funds have already raked in piles of dough, over $90 million in cash dividends since 2009, according to Biderman. Newsweekreports that New York-based hedge fund Fortress Investments, which boasts $54 billion in assets, has signaled interest in loaning $50 million to Ashley Madison’s privately held parent, Avid Life Media, over two years. Other financiers have come sniffing around to talk about a possible initial public offering, equity stakes and licensing.

So what sorts of Wall Street firms throw potential PR headaches aside and jump into the adultery business? Let’s take a moment to look at Fortress Investments.

Fortress, which went public in 2007, is long on sin and suffering—turns out there’s plenty of both to cash in on. The firm was founded in 1998 by a BlackRock veteran and a couple of UBS guys. Former presidential candidate and famed adulterer John Edwards was paid oodles of money as a consultant for the firm, which then helped fund his race for the White House. Along with the other good folks at Fortress, Edwards made a nice pot of money when Katrina devastated New Orleans and Fortress’ subprime mortgage division filed foreclosure suits against victims.

In 2007, Fortress hooked up with Centerbridge Partners to acquire Penn National Gaming, which operates casinos and horse racing venues. Fortress also saw money to be made in torturing animals, and loaned millions to animal testing company Huntingdon Life Sciences until animal rights groups pressured it to drop ties.

Remarkably, Fortress’ Mike Novogratz recently told CNN that America’s CEOs need to have a “moral revolution.” Like everything else on Wall Street, that’s rich.

Whether or not you think of adultery as a sin—and there’s plenty of hypocrisy to go around on the topic—it sticks in the craw that yet again, Wall Street has found a way to encroach upon our lives.

Note to cheaters: if you think they won’t figure out a way to leverage all the personal data you’re giving Ashley Madison, think again.

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    Ten spectacular graphic novels from 2014

    Beautiful Darkness by Fabien Vehlmann & Kerascoët
    Kerascoët's lovely, delicate pen-and-watercolor art -- all intricate botanicals, big eyes and flowing hair -- gives this fairy story a deceptively pretty finish. You find out quickly, however, that these are the heartless and heedless fairies of folk legend, not the sentimental sprites beloved by the Victorians and Disney fans. A host of tiny hominid creatures must learn to survive in the forest after fleeing their former home -- a little girl who lies dead in the woods. The main character, Aurora, tries to organize the group into a community, but most of her cohort is too capricious, lazy and selfish to participate for long. There's no real moral to this story, which is refreshing in itself, beyond the perpetual lessons that life is hard and you have to be careful whom you trust. Never has ugly truth been given a prettier face.

    Ten spectacular graphic novels from 2014

    Climate Changed: A Personal Journey Through the Science by Philippe Squarzoni
    Squarzoni is a French cartoonist who makes nonfiction graphic novels about contemporary issues and politics. While finishing up a book about France under Jacques Chirac, he realized that when it came to environmental policy, he didn't know what he was talking about. "Climate Changed" is the result of his efforts to understand what has been happening to the planet, a striking combination of memoir and data that ruminates on a notoriously elusive, difficult and even imponderable subject. Panels of talking heads dispensing information (or Squarzoni discussing the issues with his partner) are juxtaposed with detailed and meticulous yet lyrical scenes from the author's childhood, the countryside where he takes a holiday and a visit to New York. He uses his own unreachable past as a way to grasp the imminent transformation of the Earth. The result is both enlightening and unexpectedly moving.

    Ten spectacular graphic novels from 2014

    Here by Richard McGuire
    A six-page version of this innovative work by a regular contributor to the New Yorker first appeared in RAW magazine 25 years ago. Each two-page spread depicts a single place, sometimes occupied by a corner of a room, over the course of 4 billion years. The oldest image is a blur of pink and purple gases; others depict hazmat-suited explorers from 300 years in the future. Inset images show the changing decor and inhabitants of the house throughout its existence: family photos, quarrels, kids in Halloween costumes, a woman reading a book, a cat walking across the floor. The cumulative effect is serene and ravishing, an intimation of the immensity of time and the wonder embodied in the humblest things.

    Ten spectacular graphic novels from 2014

    Kill My Mother by Jules Feiffer
    The legendary Pulitzer Prize-winning cartoonist delivers his debut graphic novel at 85, a deliriously over-the-top blend of classic movie noir and melodrama that roams from chiaroscuro Bay City to Hollywood to a USO gig in the Pacific theater of World War II. There's a burnt-out drunk of a private eye, but the story is soon commandeered by a multigenerational collection of ferocious women, including a mysterious chanteuse who never speaks, a radio comedy writer who makes a childhood friend the butt of a hit series and a ruthless dame intent on making her whiny coward of a husband into a star. There are disguises, musical numbers and plenty of gunfights, but the drawing is the main attraction. Nobody convey's bodies in motion more thrillingly than Feiffer, whether they're dancing, running or duking it out. The kid has promise.

    Ten spectacular graphic novels from 2014

    The Motherless Oven by Rob Davis
    This is a weird one, but in the nervy surreal way that word-playful novels like "A Clockwork Orange" or "Ulysses" are weird. The main character, a teenage schoolboy named Scarper Lee, lives in a world where it rains knives and people make their own parents, contraptions that can be anything from a tiny figurine stashable in a pocket to biomorphic boiler-like entities that seem to have escaped from Dr. Seuss' nightmares. Their homes are crammed with gadgets they call gods and instead of TV they watch a hulu-hoop-size wheel of repeating images that changes with the day of the week. They also know their own "death day," and Scarper's is coming up fast. Maybe that's why he runs off with the new girl at school, a real troublemaker, and the obscurely dysfunctional Castro, whose mother is a cageful of talking parakeets. A solid towline of teenage angst holds this manically inventive vision together, and proves that some graphic novels can rival the text-only kind at their own game.

    Ten spectacular graphic novels from 2014

    NOBROW 9: It's Oh So Quiet
    For each issue, the anthology magazine put out by this adventurous U.K.-based publisher of independent graphic design, illustration and comics gives 45 artists a four-color palette and a theme. In the ninth issue, the theme is silence, and the results are magnificent and full of surprises. The comics, each told in images only, range from atmospheric to trippy to jokey to melancholy to epic to creepy. But the two-page illustrations are even more powerful, even if it's not always easy to see how they pertain to the overall concept of silence. Well, except perhaps for the fact that so many of them left me utterly dumbstruck with visual delight.

    Ten spectacular graphic novels from 2014

    Over Easy by Mimi Pond
    When Pond was a broke art student in the 1970s, she took a job at a neighborhood breakfast spot in Oakland, a place with good food, splendid coffee and an endlessly entertaining crew of short-order cooks, waitresses, dishwashers and regular customers. This graphic memoir, influenced by the work of Pond's friend, Alison Bechdel, captures the funky ethos of the time, when hippies, punks and disco aficionados mingled in a Bay Area at the height of its eccentricity. The staff of the Imperial Cafe were forever swapping wisecracks and hopping in and out of each other's beds, which makes them more or less like every restaurant team in history. There's an intoxicating esprit de corps to a well-run everyday joint like the Imperial Cafe, and never has the delight in being part of it been more winningly portrayed.

    Ten spectacular graphic novels from 2014

    The Shadow Hero by Gene Luen Yang and Sonny Liew
    You don't have to be a superhero fan to be utterly charmed by Yang and Liew's revival of a little-known character created in the 1940s by the cartoonist Chu Hing. This version of the Green Turtle, however, is rich in characterization, comedy and luscious period detail from the Chinatown of "San Incendio" (a ringer for San Francisco). Hank, son of a mild-mannered grocer, would like to follow in his father's footsteps, but his restless mother (the book's best character and drawn with masterful nuance by Liew) has other ideas after her thrilling encounter with a superhero. Yang's story effortlessly folds pathos into humor without stooping to either slapstick or cheap "darkness." This is that rare tribute that far surpasses the thing it celebrates.

    Ten spectacular graphic novels from 2014

    Shoplifter by Michael Cho
    Corinna Park, former English major, works, unhappily, in a Toronto advertising agency. When the dissatisfaction of the past five years begins to oppress her, she lets off steam by pilfering magazines from a local convenience store. Cho's moody character study is as much about city life as it is about Corinna. He depicts her falling asleep in front of the TV in her condo, brooding on the subway, roaming the crowded streets after a budding romance goes awry. Like a great short story, this is a simple tale of a young woman figuring out how to get her life back, but if feels as if it contains so much of contemporary existence -- its comforts, its loneliness, its self-deceptions -- suspended in wintery amber.

    Ten spectacular graphic novels from 2014

    Through the Woods by Emily Carroll
    This collection of archetypal horror, fairy and ghost stories, all about young girls, comes lushly decked in Carroll's inky black, snowy white and blood-scarlet art. A young bride hears her predecessor's bones singing from under the floorboards, two friends make the mistake of pretending to summon the spirits of the dead, a family of orphaned siblings disappears one by one into the winter nights. Carroll's color-saturated images can be jagged, ornate and gruesome, but she also knows how to chill with absence, shadows and a single staring eye. Literary readers who cherish the work of Kelly Link or the late Angela Carter's collection, "The Bloody Chamber," will adore the violent beauty on these pages.

  • Recent Slide Shows

Comments

Loading Comments...