Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
New York (HedgeCo.Net) – Former hedge fund manager turned ponzi-schemer Tom Petters is being sued by so many parties that the Minneapolis federal judge actually had to call a “timeout” yesterday.
Judge Ann Montgomery called the cease-fire after court-appointed receiver Doug Kelley pointed out that the dozens of mounting civil legal actions are interfering with their attempts to salvage some of Petter’s enterprises.
“We’re seeking some amount of breathing room to fulfill the receiver’s responsibilities,” law partner Steven Wolter told Judge Montgomery.
Petters multiple businesses, many of which are in bankruptcy, have been reduced to a single case. U.S. Bankruptcy Judge Gregory Kishel gave the order to consolidate 10 companies into one bankruptcy petition so that they may be easily dealt with.
The civil suits against Petters are coming from multiple states, with the count now over 30. Wolter argued that both time and money are issues when it comes to trying to find legal representation for the companies.
Petters Group Worldwide filed for Chapter 11 bankruptcy earlier this month after feds launched a probe into the alleged $3 billion scam orchestrated by Tom Petters. He was arrested and sent to jail on charges on money laundering, wire fraud, mail fraud and obstruction of justice.
For now, all of the civil suits are frozen until further notice. No new suits can be filed at this time.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Petters Group Worldwide has filed for Chapter 11 bankruptcy protection after feds launched a probe into an alleged $3 billion scam that was said to be orchestrated by the founder. The subsidiary company under investigation is Petters Co. Inc., a Minneapolis-based venture capital firm.
In a ponzi-like scheme, Tom Petters allegedly used new money brought in by investors to fund his lavish lifestyle by creating false retail transactions.
The company has not made any comments on the pending fraud case, only that filing for bankruptcy was “in the best interest” of the business and that the receiver will “assess the business and develop plans for them that best serve the interests of their creditors, employees, suppliers and customers.”
In addition to the federal probe, PCI also has big-time Chicago hedge fund Ritchie Capital Management to deal with. Ritchie has claimed that it lost $275 million as a result of the scam, and they want that money back.
However, there is some question as to whether Minnesota or Illinois should have jurisdiction regarding the Ritchie case. R.J. Zayed, the attorney representing Ritchie, wants the matter handled in Illinois court, saying, "We’re not just creditors, we’re victims of fraud."
This is the second fraud-related scheme that Ritchie Capital has found itself in the middle of as of late. The fund had recently purchased several hundred million dollars of life insurance from Coventry First, a Pennsylvania-based life insurance company. It was eventually found out that Coventry was defrauding clients out of millions of dollars by paying insurance brokers to suppress competitive bids.
Tom Petters was arrested earlier this month with charges of money laundering, wire fraud, mail fraud and obstruction of justice. He was denied bail.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
West Palm Beach (Hedge Co.Net)- Kirk Sean Wright, CEO of hedge fund International Management Associates of Atlanta hanged himself in a Union City jail cell Saturday night.
Wright was convicted by a federal jury on 47 counts of mail fraud, securities fraud and money laundering, stemming from a scam run through his hedge fund, International Management Associates. He collected between $115 million and $185 million for his hedge fund from at least 500 investors since 1997.
The FBI in association with the IRS, DOJ and SEC investigated why requests by current and former NFL players for their funds were ignored.
Wright maintained his innocence until the end, contending that simple mis-management was to blame for his investors’ losses.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
West Palm Beach (HedgeCo.net)- Kirk Wright’s Atlanta-based hedge fund company, International Management Associates, was found to be fraudlent leading to the conviction of the manager, Wright, as the Department of Justice unsealed a March 10 criminal complaint against him.
"The complaint alleges a fraud involving $150 million to $180 million in missing investor assets managed by Wright’s funds, International Management Associates and International Management Associates Advisory Group," said U.S. Attorney David Nahmias in a statement.
The federal complaint charges mail fraud, executed by mailing a set of false asset statements to IMA investor Stephen Atwater. The charge carries a maximum sentence of 20 years in prison and a fine of up to $250,000 on conviction.
According to authorities, Wright and his company collected more than $150 million spread across thousands of client accounts since 1997 and used false statements and documents to mislead some of them to believe the value of those investments was increasing.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
