SFO Closes Weavering Case, Declines To Press Charges

Sep 8 2011 | 8:58am ET

The U.K.’s Serious Fraud Office has called off an investigation into the collapsed hedge fund Weavering Capital and has declined to press charges against two senior employees.

The London-based fund run by Magnus Peterson went into liquidation in March 2009 and the SFO arrested Peterson and another senior Weavering employee, Edward Platt, but has now decided not to press charges.

Weavering's principal Cayman Islands hedge fund, the Weavering Macro Fixed Income Fund, claimed to manage assets worth over US$530 million but went into liquidation in March 2009 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 controlled by Weavering itself.

Earlier this year, a Cayman Islands court fined two directors of the fund (Peterson’s brother and stepfather) US$111 million each, finding them guilty of willful neglect of duty. Peterson himself is being sued for fraud and breach of duty—his five-week trial is scheduled to begin in the High Court on October 10, 2011.

In a statement, Geoffrey Bouchier of MCR, the Joint Liquidators of Weavering Capital, expressed dismay at the SFO’s action:
 
"The SFO's decision to discontinue its investigation into the actions of Magnus Peterson and Edward Platt comes as a shock and is deeply disappointing to Weavering's investors and creditors."
 
Jones Day partner Barnaby Stueck, who is leading the civil case against Magnus Peterson and others, said:
 
"The SFO’s decision is particularly surprising given the weight of evidence, the proximity of the civil trial and the fact that, in related proceedings, a Cayman Islands judge has already found that Mr Peterson defrauded Weavering's investors.
 
"It has caused investors to raise serious questions about the ability and will of British prosecuting authorities to bring criminal charges in substantial fraud cases, which can only be damaging to the City's position as a centre of international finance.”

Stueck vowed that Weavering investors would do “everything possible to ensure a criminal prosecution takes place.”
 


In Depth

Israeli Hedge Fund Harnesses Big Data

Jul 28 2014 | 8:10am ET

Apica Green is a multi-million dollar Israeli hedge fund that is based in Tel Aviv...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

Why Is The Shipping Industry Underwater?

Jul 31 2014 | 7:31am ET

Anyone who’s taken a look at the global shipping industry recently probably knows...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note