Monday, 30 November 2015
Last updated 37 sec ago
Aug 18 2010 | 2:02pm ET
Plainfield Asset Management certainly didn’t need any more bad news, but it got some earlier this month, in the form of a whistleblower lawsuit accusing it of defrauding investors.
The Stamford, Conn.-based firm—Plainfield moved from its former Greenwich digs to its former disaster recovery space earlier this year—inflated the value of its portfolio to allow it to collect higher fees from clients, according to an Aug. 6 letter to Securities and Exchange Commission Chairman Mary Schapiro. The lawsuit was filed on behalf of the would-be whistleblowers by lawyer Stuart Meissner.
Plainfield and founder Max Holmes “have knowingly and intentionally defrauded its own investors… through the fraudulent overvaluation of its own assets under management,” Meissner’s letter alleges. Some of the hedge fund’s assets are valued “in excess of their true value, enabling Plainfield to defraud its own investors by unlawfully charging higher management fees than those which it is in fact entitled to.”
The whistleblower suit was first reported by the New York Post.
The allegations of valuation inflation come amidst a pair of investigations into alleged predatory lending by the hedge fund, from both the Manhattan District Attorney’s office and Connecticut Attorney General’s office.
Plainfield has denied the whistleblower charges, calling them “without merit.”
“Our valuation policies and procedures have been scrutinized by not only Duff & Phelps, PwC and Deloitte, but also by our regulators,” Thomas Fritsch, the hedge fund’s general counsel, said.
Oct 21 2015 | 10:41am ET
One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…