Friday, 22 August 2014
Last updated 7 hours ago
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.
Aug 4 2014 | 7:42am ET
By now, U.S. and international subscribers have received their home or office delivery of the special 500th issue of Futures magazine. You can too!—a very special offer follows. The issue is the largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders. Read more…
The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note