Hedge Funds Sued By Petters Trustee

Oct 18 2010 | 10:45am ET

The court-appointed trustee in the Thomas Petters Ponzi scheme case filed the last of more than 200 clawback lawsuits last week, seeking hundreds of millions of dollars in allegedly phony profits. Among those sued by Douglas Kelley were hedge funds Ritchie Capital Management and Westford Global Asset Management.

Kelley wants Ritchie and six affiliates to return some $21 million in allegedly fraudulent transfers. It is not the first time that the Wheaton, Ill.-based firm has found itself in court over its relationship with Petters; the firm has been sued by Barclays Bank and Polaroid Corp.—one of the businesses owned by Petters. Ritchie itself has sued bother Polaroid and former Petters Group Worldwide executives Mary Jefferies and Camille Chee-Awai.

Ritchie also sought last year to block Kelley's appointment as trustee for some of Petters' bankrupt businesses.

Kelley last week also sued Steven Stevanovich's Westford, which he says served as a feeder fund for Petters' $3.65 billion Ponzi scheme. According to Kelley, Westford funneled more than $2.4 billion to Petters in the form of high-interest loans, earning the fund $323.3 million in false profits.

The trustee also cited the ongoing Securities and Exchange Commission investigation into Westford's "valuation of the loan investments."

Stevanovich denied any wrongdoing, calling Kelley's lawsuit "false in each and every respect."

"Like regulators and so many other victims of Petters, we had absolutely no indication that Petters was engaged in fraud," he said.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Hedge Fund Managers Among Top Tory Donors

Nov 14 2014 | 5:34am ET

Three hedge fund managers are among 32 people paying for the privilege of dining...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

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.