Saturday, 28 May 2016
Last updated 6 hours ago
Mar 31 2011 | 2:30am ET
A professional poker player—and Goldman Sachs veteran—has sued a hedge fund that was burned in the Arthur Nadel Ponzi scheme.
Robert Varkonyi and his wife, Olga, say that ThinkStrategy Capital Management improperly divvied up the assets of its share classes when the fund collapsed in the wake of the Nadel scandal. According to the Varkonyis, ThinkStrategy and founder Chetan Kapur swapped some Class B—the unlevered share class the Varkonyis put $1.4 million with—assets with some Class A units “with the intent of harming the Class B limited partners and benefitting KBC Financial,” which provided the leverage for the Class A shares.
After the alleged asset swap, Class B shares were left with just $4.47 million, while Class A shares had $6.5 million and KBC Financial got its $17 million back. “The assets of Class B were rendered valueless in the Ponzi scheme perpetrated by Arthur Nadel.”
The Varkonyis want their full investment back, Forbes magazine reports.
KBC told Forbes that it is “confident in this case that the bank has done nothing wrong.”
The lawsuit, filed earlier this month, is not the first against ThinkStrategy. Last year, another investor alleged that Kapur failed to perform the due diligence he promised.