Whistleblower Greenlight To Share In Settlement Spoils

May 7 2010 | 3:27am ET

Greenlight Capital has won another victory over private equity firm Allied Capital Corp., as a former Allied portfolio company has settled charges that it defied federal regulations.

The New York hedge fund had sued Business Loan Center, now called Ciena Capital, and its parent, Business Loan Express, accusing the business lender of certifying that it complied with Small Business Administration Rules when it, in fact, did not. Greenlight and its co-plaintiff, James Brickman, brought a so-called whistleblower suit against Ciena, which allows private citizens and companies to sue on behalf of the U.S. government.

Greenlight and Brickman will split $4.3 million of the $26.3 million settlement, which also resolves Greenlight’s demand that Allied Capital be held accountable for Ciena’s wrongdoing.

Ciena’s failure to heed the SBA rules emerged after several federally-backed loans the firm made and serviced defaulted. One of its former executives has been sentenced to 10 years in prison for his role in the fraud.

The settlement still requires the approval of a federal bankruptcy judge, who will hold a hearing next month.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.