Tuesday, 24 May 2016
Last updated 5 hours ago
Aug 29 2011 | 11:26am ET
A Cayman Islands court has fined two directors of collapsed hedge fund Weavering Capital US$111 million each.
The court found the two directors of the Weavering Macro Fixed Income Fund, who were not identified, guilty of willful neglect or default in the discharge of their duties, law firm Ogier Cayman said. Ogier Cayman brought the allegations against the directors on behalf of the fund's liquidators.
"The case shows that directors of Cayman Islands investment funds cannot sit idly by, leaving the management and control of the fund to its service providers," Ogier's Shaun Folpp said. "A director's duty to supervise the affairs of the company, and to exercise reasonable care, skill and diligence are non-delegable."
Weavering collapsed more than two years ago after it was unable to meet redemptions. An internal probe found that the Cayman fund's only asset was a US$637 million swap agreement with a company that was controlled by Weavering itself. Weavering CEO Magnus Peterson and another person were arrested in the case, and Peterson was sued for US$475 million.