Hedge Fund Settles Westgate Ponzi Scheme Lawsuit

Nov 29 2010 | 10:11am ET

Hedge fund Mountain Capital Management—and 44 other investors—have settled with the court-appointed receiver in the Westgate Capital Management Ponzi scheme case.

Lee Richards had filed clawback lawsuits against the Woodcliff Lake, N.J.-based hedge fund and other investors, demanding they return the fictitious profits paid out by Westgate. Richards had also accused Mountain founder Neil Monteleone of learning that fellow hedge fund Westgate was a fraud three years before it collapsed, and doing nothing about it.

Mountain denied those allegations; its lawyer, Anthony Paccione, said the firm settled as a "necessary step for all parties to try to move forward.

Mountain will return $8.88 million—the bulk of the settlements reached by Richards. Paccione said that accounted for "all of the fictitious profits that [Monteleone's] funds received over a number of years. It is important to note that my client had no knowledge of the fraud and was defrauded like all of the other victims."

The 45 settlements netted a total of $9.99 million. Richards said he has now recovered 77% of the phony profits he was seeking, adding that "a number" of clawback cases remain outstanding.

Westgate founder James Nicholson was sentenced to 40 years in prison last month for running the $140 million scam. He pleaded guilty in December, a year after his Ponzi scheme fell apart in the wake of the Lehman Brothers collapse.


In Depth

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

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

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

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.