Falling Off The A-List

By ADAM COHEN

When Dana Giacchetto was flying high, they called him the rock-'n'-roll broker. His client list was more Melrose Avenue than Wall Street: Leonardo DiCaprio, Cameron Diaz, Matt Damon, Michael Ovitz. For the club-hopping Giacchetto, the line between client and buddy was as thin as a supermodel. He put DiCaprio up in his SoHo loft and vacationed with Courtney Cox's family. He had a knack for wrapping himself in buzz. In a New York Times profile of Ovitz last May, Giacchetto dropped names the way most brokers drop bad stocks. "Get me Michael!" he reportedly shouted to an invisible assistant. "Get me Leo!" (Giacchetto denies it happened.)

But the high-flying Giacchetto has crash-landed. His glitziest investors--Matt, Cameron, Leo--have abandoned him. A high-profile venture-capital investment fund he helped set up with a subsidiary of the Chase Manhattan Bank to attract celebrity dollars has disintegrated. And the once worshipful buzz has suddenly turned ugly. In Hollywood, a town built on tales of golden boys brought down, the wags are debating the reasons for his steep descent.

Giacchetto wasn't born in the fast lane. He grew up middle-class outside Boston, the son of a novelist-radio writer and a nurse. As a young money manager in New York City, he befriended Jay Moloney, a fast-rising Hollywood agent and Ovitz protege. (Moloney committed suicide last month, after years of battling drug addiction.) With Moloney's entree, Giacchetto--blond, boyish and exuding a vulnerable aura--charmed his way into the lives and bank accounts of Young Hollywood. His new pals were dazzled by his ability to straddle two worlds. As DiCaprio manager Rick Yorn once said, he was "one of the few guys I know that can analyze a spreadsheet as well as run A&R at a record company."

In the early days, the financial advice Giacchetto doled out was as stodgy as his social life was edgy. He spent hours poring over technical charts, and then steered his clients to blue chips like Merck and AT&T. But somewhere along the way, he was seduced by the adrenaline rush of higher risk. His Cassandra Group investment management company bet heavily on Iridium, the global telephone satellite firm that filed for bankruptcy last summer. He also invested in Paradise Music & Entertainment, which was paying him to serve as a consultant. (Giacchetto says he informed most of his clients of the arrangement.)

But Giacchetto's real undoing may have been the ill-fated alliance he made last fall with Jeffrey Sachs, a principal of the Chase Capital Entertainment Partners investment fund. Cassandra-Chase looked perfect on paper: Chase brought the structure to do private equity investment, and Giacchetto brought his high-wattage clients. But friction developed fast. Among the sore points, Cassandra-Chase's investment in Digital Entertainment Network, an Internet start-up whose chairman resigned after the out-of-court settlement of a suit that alleged he had molested a 13-year-old boy.

Chase dropped Cassandra from the fund name at an acrimonious meeting two months ago, and reduced Giacchetto's role. As critical articles appeared about him, his clients began to cut their ties. Giacchetto is convinced that his Chase partners bad-mouthed him to pry away his clients. His defenders say his attempt to expand his role--he was trying to strike merchandising deals for DiCaprio in Asia--may have threatened those who currently do this work and helped drag him down.

Critics say Giacchetto made his own mistakes. He often did not have clear agreements with clients, and his financial statements were erratic. "Records were often not provided for long amounts of time," says a representative of a Giacchetto client. "Numbers were rounded off and estimated. It was a disgrace." And his jet-set ways--defying Hollywood custom that moneymen stay in the background--took a toll. "I want a button-down financial adviser who's always watching the ticker tape," says an ICM agent. "Not someone who's flying off to hang with Leo in Thailand."

If Giacchetto's fall is a cautionary tale about building a life on hype, he doesn't seem to get it. Surveying the damage last week from his 12th-floor loft--he asked a reporter to make sure to call it a penthouse--he was confident he would be able to charm his way back to the top. "Most people just got scared by the rumors," he said. "When they figure out what happened, they will all come back."

--Reported by William Dowell/New York and Jeffrey Ressner/Los Angeles

With reporting by William Dowell/New York and Jeffrey Ressner/Los Angeles