Report: Alleged ICP Fraud Aimed To Protect Hedge Fund Moore Capital

Jun 28 2010 | 7:31am ET

Moore Capital Management has been identified as the ICP Asset Management client that was supposed to benefit by the latter firm’s alleged fraud, as a second ICP employee has been sued by regulators.

New York-based ICP and owner Thomas Priore were accused last week of directing more than $1 billion in trades for four collateralized debt obligations it managed at inflated prices. According to the Securities and Exchange Commission, the firm did so to protect both ICP and “an important client.” That client, named Client A in the lawsuit, was Moore Capital, according to both Bloomberg News and The Wall Street Journal. However, the lawsuit states that instead gaining from the trades, Client A actually suffered over $200 million in losses.

New York-based hedge fund Moore Capital has not been accused of any wrongdoing.

The SEC on Friday added Aamer Abdullah, the former head of ICP’s asset-backed and mortgage-backed securities desk, to its lawsuit against ICP and Priore. The regulator accused Abdullah of defrauding the Triaxx CDOs by selling them at an inflated price. Abdullah also allegedly took part in at least one swap designed to turn a profit at the CDOs’ expense.

Abdullah left ICP in April. 

Priore has denied all of the charges.


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