By Pam Martens and Russ Martens: July 26, 2019 ~

The above photo is a screen shot taken at 7:45 a.m. this morning of a larger photo of semi-nude young females that appears above the Board of Directors’ page of the L Brands’ website. L Brands is the company founded by Leslie (Les) Wexner, its Chairman and CEO for the past half century.

L Brands owns the retail chains Victoria’s Secret, Bath and Body Works, and Pink. Since July 6 when Jeffrey Epstein was arrested and indicted for sex trafficking of underage girls and sexually assaulting dozens of them at his homes in Manhattan, Palm Beach and elsewhere, there have been steady media reports linking Epstein to L Brands and Wexner, including reports that Epstein attempted to involve himself in the selection of models for Victoria’s Secret, potentially luring his future victims.

That backdrop makes the above photo, which presents the appearance of some very young females, one of the most tone-deaf actions of any corporate board in America. Had the company never crossed paths with Epstein, the photo is still a clueless throwback to the bad ole days of sexually objectifying young women and girls.

The photo is a window into the culture of L Brands and it could not come on a worse day. The Wall Street Journal’s print edition carries a front page article that raises further troubling questions about what kind of due diligence the Board of Directors of L Brands has been doing on behalf of this New York Stock Exchange traded company, which has large institutional owners like the Vanguard and the T. Rowe Price family of mom and pop mutual funds.

The Wall Street Journal reports the following:

“For almost a decade, Mr. Epstein co-managed up to 7% of the retail company’s stock through trusts he controlled, federal filings show. Working in an office in Midtown Manhattan with 10 to 15 lawyers, accountants and administrative staff, Mr. Epstein helped with the apparel mogul’s taxes, managed his stock investments and ran his charities and trusts. He also became president of a company Mr. Wexner set up to develop the town where he lives near Columbus, Ohio, a business document shows.

“In 1991, Mr. Wexner granted Mr. Epstein authority to borrow money, pay expenses, sign contracts and handle other financial dealings on his behalf, according to power-of-attorney documents filed in Franklin County, Ohio. ‘He had absolute control of Mr. Wexner’s wealth,’ one person said.”

And then there is this in the last 24 hours from the New York Times:

“In the summer of 1996, Maria Farmer was working on an art project for Mr. Epstein in Mr. Wexner’s Ohio mansion. While she was there, Mr. Epstein sexually assaulted her, according to an affidavit Ms. Farmer filed earlier this year in federal court in Manhattan. She said that she fled the room and called the police, but that Mr. Wexner’s security staff refused to let her leave for 12 hours.”

Epstein’s $77 million mansion on the Upper East Side of Manhattan, where the Justice Department alleges underage girls were routinely sexually assaulted by Epstein, was previously owned by Wexner.

In response to the vigorous investigative reporting of Wexner’s relationship with Epstein, L Brands announced yesterday that its independent board members have hired an outside law firm to conduct an internal review. It’s highly unlikely that the FBI and the U.S. Attorney’s office for the Southern District of New York are going to let that stop them from issuing subpoenas.

And the question arises as to just how independent these board members really are. All but two board members (the most recent additions to the board) hold significant stakes of L Brands stock. The largest share owner among the “independent” board members is Raymond Zimmerman, Chairman and CEO of Service Merchandise, who owns 150,623 shares according to the most recent proxy statement. As of yesterday’s closing price of $26.21, that’s a $3.9 million conflict in our view.

Another of the so-called independent board members, Allan R. Tessler, Chairman of International Financial Group, owns 110,438 shares or $2.9 million worth.

We could find no media report that included the name of the law firm that was going to conduct this internal investigation. Let’s hope it’s not Paul Weiss. (See The Untold Story of the Paul Weiss Internal Investigation that Didn’t Catch a Massive Stock Fraud and Was Paul Weiss an Appropriate Law Firm to Investigate Sex Charges Against Roger Ailes?)