Ritchie Seeks Supreme Help In Petters Case

Dec 16 2010 | 1:10am ET

Ritchie Capital Management is taking its fight over the Thomas Petters Ponzi scheme all the way to the U.S. Supreme Court.

At least, the controversial hedge fund is going to try: Ritchie has asked the Court to overturn a lower court decision denying restitution to victims of the $3.5 billion scam. The firm also took aim at the Eighth Circuit’s refusal to hear the case without offering a reason, as Ritchie said is required by federal law.

The judge in the Petters case ruled that the proceeds recouped by the court-appointed receiver would be forfeited to the government, barring Petters’ victims from suing any of the companies controlled by Petters.

“This is a cautionary tale for all Americans, and it is very troubling to consider the potential abuses that hard-working individuals could face when a sophisticated investment fund with significant resources can be relieved of its rights without due process,” Ritchie Capital’s A.R. Thane Ritchie said. “Many of the people involved in this case have either manipulated the law or turned a blind eye to manipulation by others, and as a result have thwarted the efforts of innocent victims to recover their legitimate property.”

Just how innocent Ritchie is is the subject of some dispute. The court-appointed receiver in the case has sought $21 million in clawbacks from the hedge fund, and Ritchie has been sued by both Barclays Bank and former Petters portfolio company Polaroid Corp.

“The receivership order took away victims’ civil rights to sue the defendants to recover their losses, promising the victims restitution from the criminal case instead, and then the sentencing judge denied restitution and gave the money to the government,” Ritchie’s lawyer, Brenda Grantland, said. “The victim’s rights to recover their losses from Petters and his codefendants were permanently suspended.”


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

Concerned About Your HFT Exposure? Hedge It!

Mar 26 2015 | 1:06pm ET

High-frequency trading has been a persistent storyline for several years. The trading...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note