Petters Receiver Seeks $300M From Hedge Funds

Dec 17 2009 | 9:50am ET

Several hedge funds may have to give back millions of dollars made on their investments with convicted Ponzi schemer Thomas Petters.

Douglas Kelley, the court-appointed receiver for the Minnesota businessman and hedge fund manager’s companies, has sent letters to an unspecified number of hedge funds demanding the return of about $300 million in phony profits paid out by Petters over the years.

Petters was convicted earlier this month of running a $3.65 billion Ponzi scheme. During the trial, it emerged that at least two hedge funds had made about $300 million apiece through his scam. One, a Minnesota hedge fund called Opportunity Finance, allegedly received between $250 million and $300 million in bogus profits, while another, Epsilon Financial Management, got $300 million.

Kelley isn’t targeting just hedge funds: The receiver has also sent letters demanding clawbacks to several nonprofits that received money from Petters, including Petters’ own philanthropic foundation.


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...