Sunday, 25 January 2015
Last updated 1 day ago
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.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…